THE Central Bank of Nigeria, CBN, yesterday took the campaign for Nigerians to embrace the policy of the redesigned naira notes to the famous Onitsha main market, reminding the traders that the current denominations would cease to be legal tender on January 31,2023
The affected denominations are one thousand, five hundred and two hundred naira notes.
The branch controller of CBN, Awka, Mr. Benedict Maduagwu, who led the team, along with officials of commercial banks operating in Onitsha, assured the traders that they would not be charged any fee irrespective of the amount they deposited in the banks.
Describing currency management as a key function of CBN, he lamented that in recent times, Nigeria had faced several challenges that have continued to grow in scale and sophistication with unintended consequences for the integrity of both the apex bank and the country.
According to him, some of the challenges include a significant hoarding of banknotes by members of the public, with statistics showing that N2.72 trillion out of the N3.26 trillion currency in circulation as of June 2022 was outside the vaults of commercial banks across the country, and supposedly held by members of the public.
He said: “The statistics show that 84.71 percent of currency in circulation are outside the vaults of commercial banks, with only 15.29 percent in the Central Bank and commercial banks’ vaults.
“There is also the worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability, just as there is increasing ease by criminals and risk of counterfeiting
evidenced by several security reports received at the Central Bank of Nigeria.”
Maduagwu said the benefits of the currency redesign to the Nigerian economy were enormous, given that the policy would help to control inflation and bring the hoarded currency into the banking system, thereby making monetary policy more effective;
He added that it would also help with better design and implementation of monetary policy as the country would have much more accurate data on money supply and monetary aggregate.
“We believe that this exercise would help in increasing financial inclusion, moving towards a more cashless economy and ensuring greater formalization of the Nigerian economy.
“The currency redesign would also assist in the fight against corruption as the exercise would rein in the higher denomination used for corruption, and the movement of such funds from the banking system could be tracked easily.
Although the global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the naira had not been redesigned in almost 19 years.
“The new design and current series would continue to circulate side by side until January 31, 2023 when the outgoing denominations would cease to be legal tender.
“We advise members of the public to ensure that they deposit cash holdings in these denominations at their commercial banks.
“There is no limit to how much a customer can deposit between now and January 31, 2023 as the CBN has suspended bank charges”.
He encouraged the traders to explore other payment channels, such as eNaira, POS, electronic transfer, USSD, internet banking, and mobile money operators and agents, for their economic activities, regretting that some Nigerians were using naira notes to design their rooms.