Effective January 31, 2023, the existing N100, N200, N500, and N1,000 banknotes will cease to be accepted as a medium of exchange for any transaction conducted in Nigeria, the Central Bank of Nigeria has said.
The CBN Governor, Mr Godwin Emefiele, said this at a press conference on Wednesday in Abuja.
Emefiele said the apex bank, in line with global best practices has received the approval of President Muhammadu Buhari to redesign the bank notes new with new features.
He said when effective from December 15 this year, Nigerians who are in possession of the old notes should approach their banks for the new notes.
Explaining the rationale for the move, he said recent development in photographic technology and advancements in printing devices have made counterfeiting of currencies relatively easier.
According to him, the CBN had in recent times recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.
He also stated that there has been significant hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of currency in circulation are outside the vaults of commercial banks.
Emefiele also identified worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability; increasing ease and risk of counterfeiting evidenced by several security reports, as other reasons for the new policy.
He said, “Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5 to 8 years, the Naira has not been redesigned in the last 20 years.
“On the basis of these trends, problems, and facts, and in line with Sections 19, Subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.
“In line with this approval, we have finalized arrangements for the new currency to begin circulation from December 15, 2022.
“The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.
“Accordingly, all Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately. The newly designed currency will be released to the banks in the order of First-come-First-serve basis.
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them withdraw the new banknotes once circulation begins in mid-December 2022.”
The Governor urged members of the public to note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.
“We would like to use this opportunity to reassure the general public that the CBN would continue to monitor both the financial system in particular, and the economy in general, and always act in good faith for the achievement of the Bank’s objectives and the betterment of the country,” he added.
