Nigerian President Muhammadu Buhari on Wednesday unveiled the redesigned Naira notes as proposed by the Central Bank of Nigeria (CBN).
The launch and release of the banknotes came earlier than the December 15, 2022 date that had earlier been proposed.
The unveiling marks the first time in 19 years that Nigeria is redesigning its currency with the replacement of the current N1,000, N500 and N200 notes.
At a briefing after the ceremony before the Federal Executive Council (FEC) meeting in Abuja, the CBN governor, Mr Godwin Emefiele, debunked insinuations suggesting that the early unveiling of the new notes is meant to force some Nigerians, especially politicians — who could be holding onto huge sums of cash — to release the money, either to the banks or the economy, and also prevent them from bribing the electorate ahead of the coming general election and during the ongoing campaigns.
Mr Emefiele asked those making the assertions to desist, adding that that there is no need to perpetuate such information.
According to him, the CBN will intensify the monitoring process and interrogate the process of withdrawals.
He maintained that there will be heavy restriction on the volume of cash that people can withdraw over the counter as CBN works with the Economic and Financial Crimes Commission to monitor the purpose of any heavy transactions.
“In recent times, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.”
The governor reported that there had been significant hoarding of banknotes with statistics showing that over 85 percent of the money in circulation was outside the vaults of commercial banks.
“N2.73 trillion ($4.9 billion) out of the N3.23 trillion ($5.7 billion) in circulation exists outside the vault of the commercial banks. Evidently, currency in circulation has more than doubled since 2015, rising from N1.46 trillion ($2.6 billion) in December 2015 to N3.23 trillion ($5.7 billion) as at September 2022,” he added.
He explained that the CBN was convinced that the incidents of terrorism and kidnapping would reduce as access to large volumes of money outside the banking sector, which is used for ransom payment, will begin to dry up.
Mr Emefiele added that the policy would solve the problems of the worsening shortage of clean banknotes as well as the increasing ease and risk of counterfeiting.
“Indeed, recent developments in photographic technology and advancements in printing devices have made counterfeiting relatively easier.
"In recent years, the CBN has recorded significantly higher rates of counterfeiting, especially at the higher denominations of N500 and N1,000 banknotes,” he said.
Bank charges suspended
He said that in line with the transition from old notes to new ones, bank charges for cash deposits have been suspended with immediate effect.
New and existing naira notes will remain legal tender and circulate together until January 31, 2023 when the existing currencies will stop being legal tender.
"All banks currently holding the existing denominations of the currency were expected to begin returning these notes to the CBN effective immediately, as the newly designed currency will be released to the banks on a first-come-first-served basis,” the governor said.