Nigeria will start circulating newly redesigned currencies starting December 15, 2022, as President Muhammadu Buhari says there is no going back on the policy.
The Central Bank of Nigeria (CBN) has announced its planned redesign of N200, N500 and N1,000 notes, with the current notes in circulation ceasing to be legal tender by the end of January 2023.
The bank described that plan as a move to counter terrorism financing, hoarding of banknotes and the increasing ease and risk of counterfeiting.
The change of the banknotes, which comes as the nation prepares for the general election in February 2023, according to political pundits, is intended to push politicians to release huge amounts of money they could be holding into circulation.
Although the policy is not going down well with some Nigerians, President Buhari, whose tenure ends on May 29, 2023, said there was no going back on the policy, which was announced on October 26, 2022.
“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.” CBN Governor Godwin Emefiele said in defence to the move.
The governor reported that there had been significant hoarding of banknotes, with statistics showing that over 85 per cent of monies in circulation were 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,” Governor Godwin Emefiele.
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,” Governor Godwin Emefiele.
He further stated 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 Central Bank of Nigeria.