Redesigned Naira Denominations Would Help CBN Implement Better Monetary Policy Objectives—President Buhari
President Muhammadu Buhari has said that the redesigned naira denominations would help the CBN implement better monetary policy objectives and enrich the collective memory of the country’s heritage.
According to him, the newly redesigned N1, 000, N500, and N200 denominations unveiled by the Central Bank of Nigeria (CBN) had been fortified with security features that will make them difficult to counterfeit.
The president who spoke at the launch of the redesigned naira notes, just before the starting of the Federal Executive Council (FEC) meeting, expressed delight that the new currencies were locally produced by the Nigerian Security Printing and Minting (NSPM) Plc.
He commended the CBN governor, Godwin Emefiele, and his deputies for the initiative, while also thanking Managing Director, Executive Directors, and Staff of NSPM for working with the apex bank, within a pretty short time, to make the currency redesign a reality.
Acknowledging that international best practice required central banks and national authorities to issue new or redesigned currency notes every five to eight years, the president observed that it was now almost 20 years since the last major redesign of the country’s currency was done.
According to him, “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 – grant 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 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 N200, N500, and N1000 banknotes.
“While this may not be apparent to many Nigerians, only four 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.
“The new naira banknotes have been fortified with security features that make them difficult to counterfeit.”
Earlier in his remarks, the CBN governor thanked the president for his unwavering support for the redesign and distribution of the new notes, which he said would help to control inflation, make policies more effective, ensure financial inclusion, and fight corruption.
Emefiele also stated 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 spiralling challenges on the economy, especially on security and counterfeiting.
He appreciated 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 Plc.
“Mr. President, only a president of your esteemed and incorruptible stature could have done what we are witnessing today.”
The CBN governor listed the benefits of the redesigned naira notes to include enhanced security, greater durability, attractiveness, and promotion of the country’s rich cultural heritage.
Answering reporters’ questions after the event, Emefiele said the apex bank was determined to make Nigeria a cashless economy. He said the amount of money that could be withdrawn from the counter would be drastically restricted, noting that security agents would track anyone who wants to withdraw substantial cash to determine its use
Emefiele said, “In other countries, you will find, say in the United States, 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 problem 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 re-issue 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.”
Emefiele stated further, “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 position 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.”
The CBN boss said nobody was being targeted with the currency redesign, as widely rumoured.
He stated, “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 CBN 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 CBN 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 of currency in circulation. That is the sole mandate of the CBN, 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 CBN to redesign our currencies had been resisted. And that is the reason I also read in my speech that is only a president of the esteem and statute of President Muhammadu Buhari that could have done this.