EXCITING NEWS: TNG WhatsApp Channel is LIVE…
Subscribe for FREE to get LIVE NEWS UPDATE. Click here to subscribe!
Following the naira redesign, introduced by the Central Bank of Nigeria, the total amount of currency-in-circulation in the country has dropped from N3.29tn as of the end of October 2022 to N1.38tn as of the end of January 2023.
According to figures from CBN, the country has witnessed a drop of N1.91tn in the three-month period.
The Governor, CBN, Godwin Emefiele, had in October 2022, announced plans to redesign the old N200, N500 and N1,000 notes.
Emefiele also announced deadlines for Nigerians to swap their old with the new notes.
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them to withdraw the new banknotes once circulation begins.”
In recent years, he said, the CBN had recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.
He decried the challenges associated with currency management including significant hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of currency-in-circulation was outside the vaults of commercial banks.
Other challenges, he added included shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability; and increasing ease and risk of counterfeiting evidenced by several security reports.
The naira redesign and the suspension of old notes from being used as legal tender led to scarcity of the currency in the country.
To address the situation, president Buhari ordered the re-introduction of the old notes till April 3rd to cushion the effect of the scarcity.
Although the global best practice was for central banks to redesign, produce and circulate new local legal tender every five to eight years, he said, the naira had 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 the President to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels,” Emefiele said.
Before the currency redesign plan of the CBN, huge figure of currency in circulation was recorded.
According to the CBN, the currency in circulation rose by N58.36bn to N2.84tn in September 2022 from N2.79tn in August.
The currency in circulation rose to N2.81tn in July, 2022 from N2.74tn at the end of June, 2022. It fell to N2.79tn in May from about N2.80tn at the end of April.
Currency-in-circulation is defined as currency outside the vaults of the central bank; that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks, according to the apex bank.
Many Nigerians have resorted to electronic transfer of cash to meet up with daily business transactions but failing banking networks still remain a stumbling block.