The Central Bank of Nigeria (CBN) on Thursday identified counterfeiting and hoarding of naira notes as the reasons for its decision to redesign and issue new bank notes.
Mrs Amina Abdulmalik, Deputy Director, Currency Operations Department, CBN, made the disclosure at the apex bank’s special day, at the ongoing 36th Lagos International Trade Fair in Lagos.
”We have huge challenge of counterfeits, 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 counterfeit; and most central bank in the world redesign when they see the level of counterfeit 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 per cent of our currency in circulation is outside the bank.
“Whoever does that is Into illegal activities, either kidnapping. If you are afraid of taking your bank notes to the bank, then you have something to hide,” she said.
Abdulmalik also said that the apex bank’s major mandate, which was issuance of tender currency was serious challenge to the bank as it involves 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 Nigeria security printing and minting to print.
“They are CBN 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 logistic and cost.
‘The bank notes we issued are meant to come back where they will be processed into fit and unfit. The unfit are meant to be withdrawn and the fit reissued.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 that redesigning of bank notes which was a normal CBN process, was what Central Banks around the world do.
She said, “we’ve done it in the past, it did not generate concerns but because of the social media, we seem to have a challenge.’
Abdulmalik therefore, called on private sectors, those who have flay in currency management’ to go to the banks website to register and join in moving cash.
She said, ” we register CIT companies, if you go to our website, you will see the requirements, you can move cash, that aspect of distribution, we can outsource to the private sector.
” So it’s something that we expect Nigerians that have the resources to do that.
“You can also participate in processing, you can go to our website, you will see the requirements, if you have the required capital, we can outsource that to you.
“Bank can bring in the bank notes, you help them to sort clean and unclean. That will also help in currency management.
“There’s need to reduce that cash in circulation so that we can use other channel.”
Dr Michael Olawale-Cole, president, Lagos Chamber of Commerce and Industry (LCCI), urged the apex bank to consider converting lower currency notes into coins.
.” As regards issuance of new naira notes, the CBN should also consider converting the country’s Lower currency notes into coins to facilitate highly repetitive retail transactions and avoid printing pieces of low-value notes with a short lifespan.
“We also appeal to the CBN to adopt more innovative ways, establish appropriate policies and take actions that will drive down the inflation rate and strengthen the value of our naira ,” he said.
Olawale-Cole, was represented by Mr Gabriel Idahosa, deputy president, LCCI.
The News Agency of Nigeria reports that the theme of the 2022 annual fair is, “Connecting Businesses, Creating Value.”