PRESS REMARKS BY GOVERNOR GODWIN EMEFIELE ON
ISSUANCE OF NEW NAIRA BANKNOTES
Good afternoon Ladies and Gentlemen, and welcome
to this special press briefing of the Bank. We have called
this gathering to inform relevant stakeholders and the
general public of persisting concerns we are facing with
the management of our current series of banknotes, and
currency in circulation, particularly those outside the
banking system in Nigeria.
As you all may be aware, currency management is a
key function of the Central Bank of Nigeria, as enshrined
in Section 2 (b) of the CBN Act 2007. Indeed, the
integrity
of a local legal tender, the efficiency of its supply, as
well
as its efficacy in the conduct of monetary policy are some
of the hallmarks of a great Central Bank.
In recent times, however, 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.
These challenges
primarily include:
Significant hoarding of banknotes by members of
the public, with statistics showing that over 80
percent of currency in circulation are outside the
vaults of commercial banks;
Worsening shortage of clean and fit banknotes
with attendant negative perception of the CBN
and increased risk to financial stability;
Increasing ease and risk of counterfeiting
evidenced by several security reports.
Indeed, recent development 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.
Although global best practice is for central banks to
redesign, produce and circulate new local legal tender
every 5–8 years, the Naira has not been redesigned in the
last 20 years.
On the basis of these trends, problems, and facts,
and in line with Sections 19, Subsections a and b of the
CBN Act 2007, the Management of the CBN sought and
obtained the approval of President Muhammadu Buhari to
redesign, produce, and circulate new series of banknotes
at N100, N200, N500, and N1,000 levels.
In line with this approval, we have finalized
arrangements for the new currency to begin circulation
from December 15, 2022.
The new and existing
currencies shall remain legal tender and circulate together
until January 31, 2023 when the existing currencies shall
seize to be legal tender.
Accordingly, all Deposit Money Banks currently
holding the existing denominations of the currency may
begin returning these notes back to the CBN effective
immediately. The newly designed currency will be
released to the banks in the order of First-come-Firstserve
basis.
Customers of banks are enjoined to begin paying into
their bank accounts the existing currency to enable them
withdraw the new banknotes once circulation begins in
mid-December 2022. All banks are therefore expected to
keep open, their currency processing centers from
Monday to Saturday so as to accommodate all cash that
will be returned by their customers.
For the purpose of this transition from existing to new
notes, bank charges for cash deposits are hereby
suspended with immediate effect. Therefore, DMBs are to
note that no bank customer shall bear any charges for
cash returned/paid into their accounts.
Members of the public are to please note that the
present notes remain legal tender and should not be
rejected as a means of exchange for purchase of goods
and services.
We would like to use this opportunity to reassure the
general public that the CBN would continue to monitor
both the financial system in particular, and the economy
in
general, and always act in good faith for the achievement
of the Bank’s objectives and the betterment of the country.
I thank you for listening.
Godwin Emefelie
Governor
