President Muhammadu Buhari, on on Wednesday, explained the reason he approved the redesign of the new Naira banknotes.
Speaking 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.
He said, ‘‘the new Naira banknotes have been fortified with security features that make them difficult to counterfeit.’’
He also added that the new banknotes would help the Central Bank 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 Managing Director, Executive Directors and Staff of the Nigerian Security Printing and Minting PLC “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.”
Acknowledging that international best practice requires central banks and national authorities to issue new or redesigned currency notes every 5 to 8 years, the President noted that it is 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.
In his remarks, the Governor of CBN, Godwin Emefiele, thanked the President for his unwavering support for the redesign and distribution of the new notes, which he said will control inflation, make policies more effective, ensure financial inclusion and fight corruption.
The CBN Governor also noted that by international best practice, the redesign of notes should be every five to eight years, and the currency in circulation had been in usage for 19 years, with spiraling challenges on the economy, especially on security and counterfeiting.
Emefiele also appreciated President Buhari for his insistence that the initial notes must be designed and produced within the country, further placing confidence in Nigerian Security Printing and Minting.
“Mr. President, only a President of your esteemed and incorruptible stature could have done what we are witnessing today,’’ he added.
The CBN Governor listed the benefits of the redesigned naira notes to include enhanced security, greater durability, attractiveness and promotion of rich cultural heritage.
Speaking to State House correspondents, the CBN governor said, “The practice worldwide is that currencies should be redesigned or replaced or reissued every five to eight years. But for Nigeria, we have not had the opportunity of redesigning and reissuing currency in the last almost 19 years.
“The Central Bank of Nigeria, by law has a mandate to reissue and redesign currency for the country and for Nigerian people, every five to eight years. And I want to hope that after the event of today, the Central Bank of Nigeria can just take it as part of its programmes to see to it that within five to eight years, the currencies are designed or reissued.
“It is because mainly the Central Bank should be able to have full control of the size currency in circulation, that is the sole mandate of the Central Bank of Nigeria, because it has implications for monetary policy management in the country.
“There is no need for anybody to think that this programme is targeted at anyone. Like you heard the President speak in the chambers, he said that this discussion to redesign and reissue this currency started earlier in the year.
“We took painstaking efforts in looking at the pros and cons and the reasons when and why it should be done. And the President in his wisdom, decided that yes, it must be done.
“In the past, I have to confess that attempts by the Central Bank of Nigeria to redesign our ratio currencies have been resisted. It is only a president of the esteem and statute of President Muhammadu Buhari that could have done this. And I want to seize the opportunity to appeal to members of the public that there is no need for any insinuations, giving the impression that this is targeted at any individual there is no attempt at that. We’re doing our work and we would continue to do our work.
“In other countries you will find, say in the US, if 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. If 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 cash economy. The world has moved away from predominantly cash to 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 why with 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 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 good purpose. 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 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.”
On the call by some groups asking for an extension of the policy implementation, he said, “Well, it is in their minds when they said the time is too short. We will not go with them on that destination. What we are saying is this; we announced this programme October 26t, 2022. And we have said that from today, this currency that is reissued will be legal tender in Nigeria and all over the world wherever it’s going to be accepted.
“So we believe between October 26t, 2022 to January 31, 2023, we believe that is more than 100 days. Like the president has said, if you have cash it should not take you more than 100 days to be able to deposit it in your bank and take whatever little quantity you need for use. We have made adequate arrangement; the banks have been told that they will keep their currency processing center open from Mondays to Saturdays even to late hours every day.
“We have also offered that the Central Bank of Nigeria currency processing centers across all 36 states including Abuja, 37, will be available to process cash from Mondays to Saturdays.
“It might interest us to know that on a daily basis, the deputy governor operations calls the banks, the CBN currency processing centers to find out if there are queues or if there are some form of congestion about people depositing cash. There is none.
“We have also made available through our agency banking arrangement people in the villages can use POS and their stores to receive and pay cash.
“In 2018, we had 86,000 touch points of agency banking, as at October the number of those who have financial system touch points are 1.4 million. So there is no local government that you don’t have agent bankers that can do this on our behalf. So it’s as good as saying we have over one million points or branches of banks where you can deposit or take your cash to.
“There is no reason for anyone to say he cannot access cash or be able to pay his take into a bank. So we are not going to go with those people on their journey to say that time is short. In our wisdom and the wisdom of Mr. President time is not short. We have more than ample time to do so.”
On how the CBN will address the issue of counterfeit notes in circulation with the resigned notes, Emefiele said, “Let me tell you this, these notes cannot be counterfeited because of the security features in them, nobody can counterfeited them. What you could only find will be people making photocopy of these notes.
“If you follow due process to check the authenticity of a currency, take them through the UV light, you will find that this currency cannot be counterfeited. The best you will find is photocopies.
Asked how much mopped up so far, the CBN governor said, “Like I told you, those kind of volume we don’t like to disclose. Like we told you, N3.23 trillion is in circulation and out of that N2.72 trillion is outside the bank vault. And we will insist that those N2.72 trillion must return to the bank vault by January 3t, 2023. If you choose to hold it after January 31st, 2023 it will become useless in your hand that’s all.