While the new naira is causing long queues at ATMs, there’s an abundance of it at parties of late. Last week, videos of people spraying the new naira notes at parties circulated on social media, while others faced long lines and waited at ATMs to obtain the new currency.
Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) has insisted that commercial banks have enough naira notes.
BusinessDay gathered that after the rollout of the new naira, some partygoers, high net worth customers, also known as priority customers of lenders, and currency traffickers collaborated with bank staff to mop up large amounts of the redesigned naira notes.
How many new notes did CBN say it printed?
The apex bank ordered the printing of 500 million pieces of new naira notes in the first contract of the redesign project, which rolled out on December 15, 2022, Aisha Ahmad, CBN, deputy governor in charge of financial system stability, told House of Representatives hearing on implementation of CBN cashless policy and the new withdrawal limits, on December 22, 2022.
When were the new notes printed & distributed?
The CBN on October 26, 2022, announced that higher denominations of the Naira including N200, N500 and N1,000 would be redesigned and introduced into the economy from December 15, 2022, while commercial banks were directed to return existing denominations to the CBN.
Read also: Exchange rate steadies amid new naira scarcity
The new naira became a legal tender on December 15, 2022, after it was unveiled by President Muhammadu Buhari on November 23 of the same year.
Further to the launch of the redesigned naira notes, the CBN reviewed the cash withdrawal limit for individuals to N500,000 from N100,000 and that of corporate organisations to N5 million from N3 million.
Why do Nigerians love paying a premium to spray mint notes?
There are several reasons why some Nigerians enjoy paying a premium to have their currency notes sprayed with mint. Generally, Nigerians tend to be extravagant, and dramatic, and love having and love to have a good time. This reality is obvious at our ceremonies and functions.
Also, some people believe that the mint spray has a refreshing scent and makes handling cash more enjoyable. Additionally, some people believe that mint spray has antimicrobial properties that help to reduce the spread of germs, which is important in a country with a high population density. Finally, for some, the mint spray has become a status symbol and is seen as a sign of wealth and sophistication.
What is different about these notes
The binders holding the bundles of naira are not stamped and do not have bank names printed on them, raising suspicions.
Where are the notes from
This could only mean that these bundles are money meant for a commercial bank that did not go into the banking system and got to the public through other means.
The lack of stamps and bank names on the binders of the bundles infers that those notes were not issued in a banking hall nor collected at an ATM. The package in polyethene shows that they are directly from the mint.
How does it affect the cashless economy mandate?
The CBN views the cashless policy as a means to reduce the amount of physical cash in circulation, encouraging the use of electronic platforms for settlement or payment for goods and services.
The redesign of the new notes and submission of the old notes and cash withdrawal policy was to attract up to N2.65 trillion ($6 billion) that were outside the banking sector as of November last year.
Excess notes such as this contravene the CBN cashless policy that wants to bring all money into the banking system.
What is the CBN stance on spraying money at parties
In a press release by the CBN on February 2, signed by Osita Nwanisobi,
Director of Corporate Communications the issue of spraying of naira notes, and activities of persons who sell the newly redesigned banknotes was addressed.
“We wish to state unequivocally that, contrary to the practice of these unpatriotic persons, it is unlawful to sell the Naira, hurl (spray), or stamp on the currency under any circumstance whatsoever,” it said.
Laws regarding these issues were stated in the press release.
“For the avoidance of doubt, Section 21(3) of the Central Bank of Nigeria Act 2007 (As amended) stipulates that “spraying of, dancing or matching on the
Naira or any note issued by the Bank during social occasions or otherwise howsoever shall constitute abuse and defacing of the Naira or such note and shall be punishable under the law by fines or imprisonment or both.”
“Similarly, Section 21(4) states that “It shall also be an offence punishable under Sub-section (1) of this section for any person to hawk, sell or otherwise trade in the Naira notes, coins or any other note issued by the Bank.”
It stated that the Central Bank of Nigeria (CBN) is collaborating with the Nigeria Police, Federal Inland Revenue Service (FIRS), the Economic and Financial Crimes Commission (EFCC), and the Nigerian Financial Intelligence Unit (NFIU) to address the unpatriotic practice.
