The decision to redesign and reissue the N100, N200, N500 and N1000 notes were motivated by significant naira hoarding, a worsening shortage of clean and fit banknotes, and the ease of counterfeiting, as said by the Central Bank of Nigeria (CBN).
The Central Bank of Nigeria's Governor, Godwin Emefiele, announced the bank's decision to redesign and reissue higher denomination naira notes on Wednesday in Abuja.
CBN EXPLAINS WHY NAIRA WILL BE REDESIGNED.
"Recently, currency management has faced several daunting challenges, which have grown in scale and sophistication.
It has attendant and unintended consequences for the CBNs and the country's integrity," he said.
Godwin Emefiele stated that hoarding banknotes by public members resulted in over 80 percent of currency being outside commercial banks' vaults.
He added that as of September 2022, the available data at the CBN indicated that N2.7 trillion out of the N3.23 trillion currency in circulation was outside commercial bank vaults across the country and supposedly held by members of the public.
He continued, "Evidently, since 2015, the currency in circulation has more than doubled, rising from N1.46 trillion in December 2015 to N3.23 trillion in September 2022. I must say that this is a worrisome trend that can't continue to be allowed."
He also added that the worsening shortage of clean banknotes hurt the perception of CBN with the increased risk to financial stability.
The CBN helmsman further stated that the current banknotes were relatively easy to counterfeit, as evidenced by several security reports.
Banknotes of N100, N200, N500, and N1,000 levels are to be redesigned and circulated by the Central Bank of Nigeria (CBN) Governor, Mr. Godswill Emefiele. He has said this is in line with the CBN Act.
He urged bank customers to begin paying the existing currency into their bank accounts to enable them to withdraw the new banknotes once it starts circulating in mid-December 2022.
He also directed all Deposit Money Banks currently holding the existing denominations of the currency to start returning the notes to the CBN immediately after the newly designed currency.
This is also for the early birds. He added that all banks are to keep their currency processing centers open from Monday to Saturday to accommodate all cash returned by their customers.
Mr. Emefiele further stated that bank charges for cash deposits are on hold with immediate effect for the transition from existing to new notes.