Why we must redesign the Naira every five to eight years, by Emefiele
Recently, President Muhammadu Buhari unveiled the newly redesigned Naira notes at the Council Chambers of the Presidential Villa, Abuja. The Governor of the Central Bank of Nigeria, (CBN) Godwin Emefiele, at an interactive session with the State House Press Corps, immediately after, explained why Naira should be redesigned every five to eight years, in line with global best practices, to prevent counterfeiting, hoarding, amongst others. State House Correspondent, TONY AILEMEN, was there for BusinessDay SUNDAY. Excerpts:
The insinuations out there are that the currency redesign is targeted at certain politicians, especially because of the timing. What is your response to this, please?
The practice worldwide is that currencies should be redesigned, replaced, or reissued every five to eight years. But for Nigeria, we have not had the opportunity to redesign and reissue currency in almost 19 years. The Central Bank of Nigeria, by law, has the mandate to reissue and redesign currency for the country and for Nigerian people, every five to eight years. And I want to hope that after the event of today, the Central Bank of Nigeria can just take it as part of its programmes to see to it that within five to eight years, the currencies are designed or reissued. It is because the CBN should be able to have full control of the size of currency in circulation, that is the sole mandate of the Central Bank of Nigeria, because it has implications for monetary policy management in the country. There is no need therefore, for anybody to think that this programme is targeted at anyone. Like you heard the President speak in the Council chambers, he said that this discussion to redesign and reissue this currency started earlier in the year.
We took painstaking efforts in looking at the pros and cons and the reasons when and why it should be done. The President in his wisdom, decided that yes, it must be done. In the past, I have to confess that attempts by the Central Bank of Nigeria to redesign our nation’s currencies had been resisted by politicians. And that is the reason I also read in my speech, that, it is only a President of the esteem and statute of President Muhammadu Buhari that could have done this. And I want to seize the opportunity to appeal to members of the public that there is no need for such insinuations, giving the impression that this is targeted at any individual. We are not targeting anybody. We’re doing our work and we would continue to do our work.
Only recently, the EFCC said some governors are trying to frustrate this new policy and there was a report of a particular presidential candidate who withdrew N40 million to share at a community. What are your plans to ensure this policy succeeds?
Like I said earlier, our plan to redesign and reissue the new Naira notes is not targeted at anyone. But of course, we have the laws and we will indeed be more intense in ensuring that the provisions of the law and our CBN regulations about the size and volume of currency that people can carry, or hold or withdraw are enforced. Going forward, we will insist that this is done. In other countries, if you want to withdraw, for example about $10,000 or £10,000 across the counter, you will be interrogated and you will be made to fill numerous forms, and they will even track the use of that fund that you are withdrew. The problem we have had in the past is that we say this is a cash economy. There is no economy that is inbuilt thinking that it has to be cash economy. The world has moved away from predominantly cash to cashless economy. And I think Nigeria and the Central Bank of Nigeria is prepared at this time to move towards a cashless economy. And that is the reason why with the reissue of these notes, we will ensure that our economy is cashless nationwide, going forward. We will restrict the volume of cash that people can withdraw over the counter.
If you need to withdraw large volume of cash, you will fill uncountable forms. We will take your data, whether it is your biometrics verification number (BVN) and your National Identification Number (NIN), so that enforcement agencies like EFCC or ICPC can follow you and be sure that you are taking that money for good purpose. We have to work as a country, Nigeria is the biggest country both in population and economy in Africa and we have to ensure that we do things the right way that also positions us as leader in Africa and one of the leading countries in the world. We must do things right and I think it would start from today.
Certain groups have called for an extension of this policy implementation. What will be your response to them?
Well, it is in their minds when they said the time is too short. We will not go with them on that destination. What we are saying is this, we announced this programme October 26th, 2022. And we have said that from today, this currency that is reissued will be legal tender in Nigeria and all over the world wherever it’s going to be accepted. So we believe between October 26th, 2022 to January 31st, 2023, we believe that is more than 100 days. Like the president has said, if you have cash it should not take you more than 100 days to be able to deposit it in your bank and take whatever little quantity you need for your use. We have made adequate arrangement, the banks have been told that they will keep their currency processing center open from Mondays to Saturdays, henceforth and even to late hours every day. We have also offered that the Central Bank of Nigeria currency processing centers across all 36 states including Abuja, will be available to process cash from Mondays to Saturdays.
It might interest us to know that on a daily basis, the CBN deputy governor operations, calls the banks, the CBN currency processing centers to find out if there are queues or if there are some form of congestion about people depositing cash. There is none. We have also made other avenues available through our agency banking arrangement, that allow people in the villages to use POS machines, and their stores to receive and pay cash.
In 2018, we had 86,000 of such points of agency banking, as at October, this year, the number of those who operate such financial points have grown to 1.4 million. So there is no local government that you don’t have agent bankers that can do this on our behalf. So it’s as good as saying we have over one million points or branches of banks where you can deposit or take your cash to. There is no reason for anyone to say he cannot access cash or be able to pay his into a bank. So we are not going to go with those people on their journey to say that time is short. In our wisdom and the wisdom of Mr. President time is not short. We have more than ample time to do so.
How do you intend to address the issue of counterfeit notes in circulation with these resigned notes?
Let me also use this opportunity to tell Nigerians that these notes cannot be counterfeited because of the security features in them. Nobody can counterfeited them. What you could only find will be people making photocopy of these notes. If you follow due process to check the authenticity of a currency, take them through the UV light, you will find that this currency cannot be counterfeited. The best you will find is photocopies. What I am trying to say is that to reduce that incidence of counterfeiting or photocopying that is why we are saying the CBN must now redesign and reissue the Naira, every five to eight years. So, that those who think they can take advantage of the system by counterfeiting or hoarding the Naira, will know that the game is over for them.
How much has been mopped up so far?
Like I told you, those kind of volume we don’t like to disclose. Like we also told you, N3.23 trillion is in circulation and out of that N2.72 trillion is outside the banking system. This is why we are insisting that those N2.72 trillion must return to the bank vault by January 31st, 2023. If you chose to hold it after January 31st, 2023 it will become useless in your hand that’s all.