To combat counterfeiting and kidnapping, CBN is redesigning the naira note

 Godwin Emefiele, the governor of the Central Bank of Nigeria, declared on Wednesday that the bank would issue new naira notes by

December 15, 2022.

Yesterday in Abuja, Emefiele made this declaration and provided justifications for the action.

The CBN governor claimed that this was done to limit the amount of counterfeit money in circulation and to prevent kidnappers and terrorists from receiving ransom payments.

In fact, he said, "Some of the trademarks of a great central bank are the integrity of a local legal money, the efficiency of its supply, and its efficacy in the conduct of monetary policy.

However, in recent years, currency Management has had to deal with a number of difficult problems that have only gotten bigger and more complex, with unforeseen results for the integrity of the CBN and the entire nation.

More specifically, as of the end of September 2022, the CBN's data indicates that N2.73 trillion out of the N3.23 trillion in currency in circulation was allegedly kept by the general public outside the vaults of commercial banks across the nation. Evidently, the amount of money in circulation has increased significantly from 2015, going from N1.46 trillion in December to N3.23 trillion as of September 2022. I must add that this tendency is extremely concerning and must be allowed to continue.

With regard to how it would lessen ransom payments, he said, "Also, in view of the current level of security situation in the country, the CBN is convinced that the incident of terrorism and kidnapping will be minimised as access to large amounts of money used as a source of funds for ransom payment will begin to dry up."

He went on to list several justifications for redesigning naira notes.

the people's large stockpiling of banknotes; the worsening shortage of clean and fit banknotes, which has a bad impact on public opinion of the CBN and increases the risk to financial stability; and the rising ease and risk of counterfeiting, as shown by several security reports.

In fact, recent breakthroughs in photographic and printing technologies have made counterfeiting considerably simpler, he continued. The CBN has noted significantly greater counterfeiting rates recently, particularly for higher-denomination N500 and N1,000 banknotes.

The CBN governor added that the enhanced production of the e-Naira would complement the redesign of the currency and help to promote a cashless economy.

The top bank governor claimed that the naira had not undergone a redesign in the previous 20 years, despite the fact that it is recommended by international best practices that central banks redesign, create, and circulate new local legal tender every five to eight years.

The new series of banknotes would only be available in denominations of N100, N200, N500, and N1,000, according to a speech that was subsequently made public.

He stated that existing notes would cease to be considered as legal tender by January 31, 2023 in order to quickly get rid of the money that Nigerians are hoarding.

Emefiele further advised Nigerians to deposit their Naira bills at their banks, noting that deposits under N150, 000 will not be charged a deposit fee.

In order to handle all of the cash that would be returned by their customers, he also instructed all commercial banks to maintain their currency processing centers open from Monday through Saturday.

Changes to naira notes over time

In the past 30 years, multiple naira note revisions have occurred, but many adult Nigerians still recall them.

The Federal Government made the decision to switch from metric to decimal in 1973. As a result, the primary units of money were switched from pounds to naira and kobo.

The N20 note, at the time the biggest denomination, was launched on February 11th, 1977 by the then central bank.

It included a portrait of the late head of state, General Murtala Ramat Muhammad, who was revered at the time as a national hero because of the numerous reforms he was spearheading and his tragic death.

The government issued the N1, N5, and N10 on July 2, 1979. The engravings on the notes' backs depict many cultural features of the country according to CBN

With the exception of the N50 kobo, the nation altered the colors of all banknotes in April 1984. The justification offered at the time is still valid today: to stop the widespread cash trafficking at the time.

The creation of the N50k and N1 coins came next.

The introduction of the N100, N200, N500, and N1000 banknotes occurred in December 1999, November 2000, April 2001, and October 2005, respectively, under the new Olusegun Obasanjo administration.

While the N50, N10, and N5 continued to be produced on paper currency, the N20 was printed for the first time on a polymer substrate in February 2007. N2 coin was also introduced, while N1 and 50 kobo coins were reprinted with new designs.Due to inflation and the general preference for banknotes at the period, coins did not enjoy widespread currency. The coins were criticized for being too hefty by many.

Then CBN transformed N50, N10, and N5 into polymer substrate on September 30, 2009.

The N50 polymer currency was released by the CBN in September 2010. It released a N100 commemorative banknote on December 19, 2004.