The Central Bank of Nigeria (CBN) on Thursday gave reasons why it’s going ahead with the planned Naira Redesign.
Deputy Director, Currency Operations Department, CBN, Amina Abdulmalik said counterfeiting and hoarding were the reasons for redesigning and issuing new naira notes.
Abdulmalik spoke at the apex bank’s special day, at the ongoing 36th Lagos International Trade Fair in Lagos.
“We have a huge challenge of counterfeiting; Nigerians have set up factories and are just chunning out bank notes because those bank notes don’t come back into the banking system.
“We are not able to fish out the counterfeits; and most central banks in the world redesign when they see the level of counterfeits growing. But if you don’t have confidence in your bank notes then there’s a problem.
“Also hoarding is another challenge; people simply love to keep this money at home, because of that hoarding, you find out that 84 percent of our currency in circulation is outside the bank.
“Whoever does that is into illegal activities, like kidnapping. If you are afraid of taking your bank notes to the bank, then you have something to hide,” she said.
Abdulmalik also said the apex bank’s major mandate, which was issuance of currency, was a serious challenge to the bank as it involved lots of activities.
She said, “before we issue currency we have to plan, we have to determine the volume of bank notes that will be appropriate for the economy.
“This, we have been doing over the years and once this is done we have to send it to our Security Printing and Minting company to print.
“They are CBN’s sole printer. We have a printer in Lagos and Abuja, and that is where CBN does all the printing of currency.
“When printing is done we have to distribute, distributing the currency around Nigeria is lots of work which involves lots of logistics and costs.
“The bank notes we issued are meant to come back where they will be processed into fit and unfit. The unfit notes are meant to be withdrawn and the fit ones reissued.
“Unfortunately in Nigeria, once we issue, the notes disappear. These are the challenges around currency management that necessitated us to do a redesign,” she said.
She said redesigning of bank notes was a normal CBN process, and the responsibility of Central Banks around the world.
