CBN: Politicians In Trouble As CBN Set To Redesign N200, N500 And N1,000 Notes
Politicians that have stuffed several billions of Naira at homes and in other unholy places may run into trouble with the latest policy of the Central Bank of Nigeria (CBN), which is to redesign some of the nation’s currency notes.
“This is a smart way to move against vote-buying and control the amount of currency in circulation,” an observer exclaimed
Some politicians have amassed huge sums of Naira at different places other than banks which is the legitimate place for huge sums of money by law. The politicians intended to use the money to rig elections at various levels. Because of this policy they would not be able to get as much money as they would like to have to influence elections.
Observers believe that there is more to the policy than just trying to control the money in circulation as claimed by CBN. They said, with this policy, CBN would be able to mop up good volumes of the money already in circulation thereby incapacitating political moneybags from having enough to buy votes during the elections.
With this policy, which is going to be similar to the one that was carried out in 1984, when General Muhammadu Buhari was the Nigerian Head of State, there was a currency change, and a lot of people, including the Fulani Herdsmen in the bush would be forced to bring the money with them to the bank for change.
The Central Bank of Nigeria (CBN) on Wednesday said it will redesign the N200, N500, and N1,000 notes.
CBN Governor, Godwin Emefiele, disclosed this during a special press briefing in Abuja. The new design and issues will be effective from December 15, 2022.
The action was taken in order to take control of the currency in circulation, according to the CBN boss.
The apex bank, Emefiele stated, has secured the approval of President Muhammadu Buhari to roll out new notes to replace the existing currency in circulation.
“In line with the provisions of Sections 2(b), Section 18(a) and Section 19, Seb section(a) and (b) (2007), the management of the CBN has sought and obtained the approval of President Muhammadu Buhari to redesign, produce, release and circulate new series of banknotes at N200, N500 and N1,00 levels,” he said.
“In line with this approval, we have finalised arrangements for the new currency to begin circulation from December 15, 2022, after its launch by President Buhari.
“The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall cease to be a legal tender.”
Once the new notes are designed Nigerians are expected to take old notes to banks for the new notes.
The CBN Governor is also concerned about how Nigerian currency is being stored currently.
According to him, the bulk of the nation’s currency notes was outside bank vaults and the CBN would not allow the situation to continue.
Emefiele added, “To be more specific, as of the end of September 2022, available data at the CBN indicates that N2.7 trillion out of the N3.3 trillion currency in circulation was outside the vault of commercial banks across the country and supposedly held by members of the public.
“Evidently, currency in circulation has more than doubled since 2015, rising from N1.46 trillion in December 2015 to N3.2 trillion as of September 2022. I must say that this is a worrisome trend that must not be continued to be allowed.”
According to him, the initiative by the CBN will help address some of the nation’s security threats, especially kidnapping and terrorism.
He believes that terrorists and kidnappers capitalise on the large excess of money to carry out their nefarious activities.
Olusola Bello
*Full text of Governor Godwin Emefiele on issuance of new notes
Good afternoon Ladies and Gentlemen, and welcome to this special press briefing of the Bank. We have called this gathering to inform relevant stakeholders and the general public of persisting concerns we are facing with the management of our current series of banknotes, and
currency in circulation, particularly those outside the banking system in Nigeria.
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. Indeed, the integrity
of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.
In recent times, however, 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. These challenges primarily include:
▪ Significant hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation are outside the vaults of commercial banks;
▪ Worsening shortage of clean and fit banknotes
with attendant negative perception of the CBN and increased risk to financial stability;
▪ Increasing ease and risk of counterfeiting evidenced by several security reports.
Indeed, recent development 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.
Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has not been redesigned in the last 20 years.
On the basis of 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.
In line with this approval, 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 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 back to the CBN effective immediately. The newly designed currency will be released to the banks in the order of First-come-Firstserve basis.
Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them 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 so as to accommodate all cash that will be returned by their customers.
For the purpose of this transition from existing to new notes, bank charges for cash deposits are hereby suspended with immediate effect. Therefore, DMBs are to note that no bank customer shall bear any charges for cash returned/paid into their accounts.
Members of the public are to please note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.
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.
I thank you for listening.
Godwin Emefelie
Governor
