Nigerians were taken aback earlier today when CBN’s Godwin Emefiele revealed intentions to launch new designs for the N200, N500, and N1,000 notes by December 15, 50 days from today.
The goal of the policy change is to increase the effectiveness of monetary policy in containing inflation by bringing money from outside the banking system into it.
Significant hoarding of banknotes, a lack of clean, functional banknotes, and the ease with which banknotes might be counterfeited were a few of the main causes mentioned.
This is what Emefiele said:
1. “Statistics show that 85% of the currency in circulation are outside the volts of our commercial banks. Data shows that of the N3.23 trillion in money in circulation, N2.73 trillion was outside the vaults of commercial banks nationwide.
2. The CBN has noted significantly increasing counterfeiting rates recently, particularly given the widespread revulsion of the N500 and N100 banknotes.
3. Emefiele added that the redesign of the naira would make it harder for people to pay ransom to terrorists and kidnappers.
4. A deposit fee for Nigerians who want to deposit more than N150, 000 in cash. This is an effective approach for the government to get quick cash.
The governor of the apex bank asked Nigerians to visit their banks and deposit their Naira notes, saying that transactions less than N150,000 would not be subject to a deposit fee.
5. Emefiele added that it is past time for the currency to be redesigned. He stated, “Our current series of banknotes—the naira—has not seen a redesign in the past 20 years.
6. The Apex bank made a justifiable decision to fulfil the responsibility set forth in Section 2B of the CBN Act of 2007 to ensure a reliable and strong legal tender.
Therefore, it is no longer tenable to carry on as usual, especially in light of the constantly changing circumstances that could prevent our institution from performing at its best.
7. A new minting of our eNaira will complement the redesign of the money, in our opinion, and will help us further our efforts to establish a cashless society.