President Muhammadu Buhari has launched the new Naira banknotes, expressing delight that the redesigned currencies were locally produced by the Nigerian Security, Printing and Minting (NSPM) PLC.
The unveiling came as terrorists demanded the new notes for the payment of ransom as condition for the release of their victims.
Speaking Wednesday in Abuja at the launch of the new banknotes, which preceded the Federal Executive Council (FEC) meeting, the president explained in detail the basis for his approval to the Central Bank of Nigeria (CBN) to redesign the ₦200, ₦500 and ₦1000 banknotes.
“The new Naira banknotes have been fortified with security features that make them difficult to counterfeit,” the president said.
Buhari said the new banknotes would help the CBN design and implement better monetary policy objectives as well as enrich the collective memory of Nigeria’s heritage.
President Buhari commended the CBN governor, Godwin Emefiele, and his deputies for the initiative, while also thanking the NSPM Plc managing director, executive directors and staff members “for working tirelessly with the apex bank to make the currency redesign a reality, and for printing the new Naira notes within a comparatively short time.”
While acknowledging that international best practice requires central banks and national authorities to issue new or redesigned currency notes every five to eight years, the president said it’s now almost 20 years since the last major redesign of the country’s local currency was done.
“This implies that the Naira is long overdue to wear a new look. A cycle of banknote redesign is generally aimed at achieving specific objectives, including but not limited to: improving security of banknotes, mitigating counterfeiting, preserving the collective national heritage, controlling currency in circulation, and reducing the overall cost of currency management.
“As is known, our local laws – specifically the Central Bank of Nigeria Act of 2007 – grants the Central Bank of Nigeria the power to issue and redesign the Naira. In line with this power, the Central Bank Governor approached me earlier in this year to seek my permission to embark on a currency redesign project. I considered all the facts and reasons presented before me by the Central Bank.
“There was an urgent need to take control of currency in circulation and to address the hoarding of Naira banknotes outside the banking system, the shortage of clean and fit banknotes in circulation, and the increase in counterfeiting of high-denomination Naira banknotes. It is on this basis that I gave my approval for the redesign of the ₦200, ₦500 and ₦1000 banknotes.
“While this may not be apparent to many Nigerians, only 4 out of the 54 African countries print their currencies in their countries, and Nigeria is one. Hence, a majority of African countries print their currencies abroad and import them the way we import other goods.
“That is why it is with immense pride that I announce to you that these redesigned currencies are locally produced right here in Nigeria by our Security Printing and Minting PLC,” he said.
Emefiele on benefits
In his remarks, CBN Governor Emefiele thanked the president for his unwavering support for the redesign and distribution of the new notes, which he said would control inflation, make policies more effective, ensure financial inclusion and fight corruption.
He said by international best practice, the redesign of notes should be every five to eight years, and the currency in circulation had been in use for 19 years, with spiraling challenges on the economy, especially on security and counterfeiting.
The CBN boss also appreciated the president for his insistence that the initial notes must be designed and produced within the country, further placing confidence in the NSPC Plc.
“Mr. President, only a president of your esteemed and incorruptible stature could have done what we are witnessing today,” he said.
Emefiele also said the apex bank would henceforth take cashless policy seriously, pointing out that people would fill countless forms and provide their data before they can withdraw large amounts.
He also said contrary to believe in some quarters, the naira redesign was not targeted at any individual or group of people in the country.
On how the plans would succeed when told that the chairman of the Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, said some governors were trying to frustrate the new policy, the CBN governor said: “Like I said earlier, our policy of redesign and reissue is not targeted at anyone.
“But of course, we have the laws and we will indeed be more intense in ensuring that the provisions of the law and our CBN regulations about the size and volume of currency that people can carry, or hold or withdraw, we will insist that this is done going forward.”
“In other countries, in the US, you want to withdraw $10,000 from the counter, you will be interrogated, you will fill numerous forms, they will even track the use of that $10,000 cash that you are withdrawing. Or you want to withdraw £10,000 from the counter, they will refuse and if you insist, then you will fill forms.
“The problems we have had in the past is that we say this is a cash economy. There is no economy that is inbuilt thinking that it has to be a cash economy. The world has moved away from predominantly cash to a cashless economy. And I think Nigeria and the Central Bank of Nigeria is prepared at this time to move towards a cashless economy.
“And that is the reason for the reissue of these notes. We will insist that cashless would be nationwide. We will restrict the volume of cash that people can withdraw over the counter.
“If you need to withdraw a large volume of cash, you will fill uncountable forms. We will take your data, whether it is your BVN, your NIN so that enforcement agencies like EFCC or ICPC can follow you and be sure that you are taking that money for a good purpose.”
The CBN boss advised Nigerians against holding the old notes, insisting there was no going back on the January 31st 2023 deadline to completely render the old notes useless.
“We have to work as a country. Nigeria is the biggest country both in population and economy in Africa and we have to ensure that we do things the right way that also positions us as the leader in Africa and one of the leading countries in the world. We must do things right and I think it would start from today,” Emefiele said.
He further said, “the policy will help to control inflation as the exercise will bring the hoarded currency into the banking system, thereby making monetary policy more effective; it will also help with better design and implementation of Monetary Policy as we would have much more accurate data on money supply and monetary aggregates.
“We believe that this exercise would help in increasing financial inclusion, moving towards a more cashless economy, and ensuring greater formalization of the Nigerian economy.”
Emefiele stated that the currency redesign would assist in the fight against corruption as the exercise would rein in the higher denomination used for corruption, and the movement of such funds from the banking system could be tracked easily.
The CBN governor however said in recent times, currency management in Nigeria had faced several challenges that have continued to grow in scale and sophistication with unintended consequences for the integrity of both the CBN and the country.
Some of these challenges, according to him, primarily include “a significant hoarding of banknotes by members of the public, with statistics showing that N2.72 trillion out of the N3.26 trillion currency in circulation as of June 2022 was outside the vaults of commercial banks across the country, and supposedly held by members of the public.”
He explained that this statistic shows that 84.71 percent of currency in circulation are outside the vaults of commercial banks, with only 15.29 percent in the Central Bank and Commercial banks’ vaults.
Other challenges, he said, include “the worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability and there is increasing ease by criminals and risk of counterfeiting evidenced by several security reports received at the Central Bank of Nigeria.”
Present at the ceremony were Secretary to the Government of the Federation(SGF) Boss Mustapha, Chief of Staff to the President Professor Ibrahim Gambari, and Head of Civil Service of the Federation, Dr Folashade Yemi-Esan.
Others were ministers and the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele.
‘N165bn old notes returned’
In a related development, CBN Director of Currency Mohammed Umar Bello said some N165billion had been returned to the commercial banks ahead of the January 31 date.
Bello spoke to journalists Wednesday in Abuja while providing an update on the monetary policy.
He said: “At the inception when the governor announced the decision of the CBN and approval of the president to redesign new currency, we had in mind about N2.7 trillion that is outside the bank, while out of the N3.2 trillion currency in circulation. As at Friday last week, that is 18th ,we have total losses that we have received from the banks in the sum of N165bn which is still small. We are not seeing the rush, in fact some of the banks yesterday, the director of banking supervision had to bring it to the notice of the committee that some banks have not even made any deposits within the period and some of them have large customer base.
“It’s a problem for us and we are hoping that it will not result into stampede when we get close to the end of January. We are giving a lot of concessions to the banks. First of all, we have extended our opening period up to Saturdays since 26th of October when the announcement was made. So, CBN branches are open to receive deposits and then we waive charges on the processing of those deposits and then we remove all limits in terms of the 3rd KYC on the amount of money you can put in your account.
“I think we are still far from where we want to be, we had three scenarios; we had the optimistic where we are hoping that 80% of that N2.7 trillion will come back and then we had the pessimistic which we say maybe 40%. But the realistic we feel should be like in the region of 60%. But just like the governor reiterated yesterday, the deadline of 31st January 2023 still stands, there is no extension and people are advised to make sure that they return all those 3 denominations before the end of 31st January, 2023 because after that date, all monies held in those denominations will cease to be legal tender.”
Value remains same -Atiku
In his reaction, a spokesperson for Atiku Abubakar presidential campaign, Daniel Bwala has said the redesign would not add any value to the naira.
In a tweet Wednesday, Bwala said only the colour was redesigned.
He wrote: “The color has changed, but the value to the dollar is still the same. Renewed hopelessness.”
Bandits demand new notes
Meanwhile, some terrorists in Zamfara state have kidnapped four people — a man, a woman, and two children— In Kolo village in Gusau local government area of the state.
It was gathered that the criminals who demanded a N10 million ransom, refused to accept old naira notes, but asked for the new redesigned notes to be released on December 15.
Mohammed Ibrahim, a local, reportedly claimed that the bandits eventually lowered the demanded ransom to N5 million and that residents of the community had been working to gather the said sum.
“As we were trying to gather the money demanded by the terrorists, they sent another message this morning that they would not collect old naira notes.
“They said they would keep the abducted persons in their camps until the release of the new naira notes in December,” Ibrahim said. (Ripples Nigeria)