The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele has revealed that the plan to redesign and reissue N200, N500 and N1000 was due to the high level of counterfeiting, especially of the higher denominations of naira notes.
Speaking at the press briefing in Abuja, the Governor said “the CBN has recorded significantly higher rates of counterfeiting, especially at the higher denominations of N500 and N1,000 banknotes in recent years due to recent development in photographic technology and advancements in printing devices which have made counterfeiting relatively easier.”
“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.”
“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.”
In furtherance, he said, “Based on 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.”
It could be noted that the global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years but the Naira has not been redesigned in the last 20 years.
The CBN Governor explained further, “In line with the approval from the Federal Government of Nigeria, 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 3 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 to the CBN effective immediately. The newly designed currency will be released to the banks in the order of First-come-First[1]serve basis.”
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them to 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 to accommodate all cash that will be returned by their customers.”
“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,” he concluded.