CBN insists on cashless economy as Buhari unveils new naira notes

Nigeria’s President Muhammadu Buhari has unveiled the country’s redesigned N200, N500 and N1,000 banknotes.

The unveiling, which took place on Wednesday morning at the Council Chambers of the State House shortly before the start of this week’s Federal Executive Council (FEC) meeting, is in line with the projections of the Central Bank of Nigeria (CBN).

The CBN had in October announced plans to redesign the higher denominations of the naira notes as a way of checking rising inflation, countering counterfeiting, and disabling terrorism.

The new naira notes will go into circulation on December 15, 2022 but the old notes will remain legal tender until January 31, 2023.

On Tuesday, while announcing the decision of its Monetary Policy Committee to raise the benchmark interest rate to 16.5 percent, Godwin Emefiele, CBN governor, hinted that President Buhari would unveil the new notes on Wednesday.

Answering questions from journalists after the unveiling in Abuja, Emefiele reiterated that the naira redesign policy was not targeted at anyone but was meant to give the CBN ample control over the amount of money in circulation.

“There is no need to think that the programme is targeted at anyone. During my speech at the unveiling, I said that plans for this started early in the year. We considered the pros and cons carefully,” Emefiele said.

“In the past, attempts to redesign and reissue currencies have been resisted. Only a president of Muhammadu Buhari’s character could have made it happen,” he said.

To ensure a steady transition into a cashless economy, Emefiele informed that subsequently, there would be a drastic reduction in the amount of money that can be withdrawn from the counter as bulk withdrawal would require several procedures and security checks to track its use.

The CBN governor further said the apex bank will not extend the January 31, 2023 deadline, arguing that Nigerians have ample time to return the old notes in circulation.

“As of 2018, we had 86,000 touchpoints nationwide where Nigerians could deposit and withdraw money. In October 2022, that number has risen to 1.4 million touchpoints,” Emefiele said.

“That is to say we have over 1.4 million bank branches, POS points and other ancillary outfits to enable Nigerians return the old notes,” he said.

The CBN governor said the apex bank will now redesign the currency after every five to eight years as empowered by the constitution.