The New Naira Note: Current Notes Go Out Of Circulation January | comanefure

The New Naira Note. President Muhammadu Buhari approves redesign, production, and circulation of new series of N200, N500, and N1,000 banknotes.

Central Bank of Nigeria Governor, Mr. Godwin Emefiele says the issuance of new Naira banknotes, 20 years after last redesign exercise, will commence December 15, 2022.

CBN says new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall cease to be legal tender. CBN frowns at high rates of counterfeiting of N500 and N1,000 banknotes.

CBN says Bank seeks to mop up about N3.32 trillion outside the banks’ vaults to take control of money supply in Nigeria. “The integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank,” – Emefiele CBN faults hoarding of banknotes by members of the public; says over 80 percent of currency in circulation are outside the vaults of commercial banks.

What Will Happen To The Old 200, 500, and 1,000 Nigeria Naira Notes?

CBN directs all Deposit Money Banks currently holding the existing denominations of the currency to begin returning these notes to the CBN immediately Newly designed currency to be released to the banks in the order of first-come, first-served basis.

The Central Bank of Nigeria (CBN) has announced that effective 31 January 2023, applicable currencies in circulation shall cease to be legal tenders accepted in the Federal Republic of Nigeria. In it’s place, a new currency will go into circulation from 15 December 2022.

CBN advises bank customers to pay existing currency into their bank accounts to enable them to withdraw the new banknotes once circulation begins.

What this means for you:

Starting immediately, you should deposit your naira cash holdings in the affected denominations, at your nearest bank Branch between now and 31 January 2023.

To ease the impact on you, please note:

• Cash depositors’ details must be fully KYC complaint with BVN.
• Cash deposit charges into naira accounts will be suspended from now until 31 January 2023.

CBN Suspends Bank Charges

CBN suspends bank charges for cash deposits for the purpose of transition from existing to new notes.

CBN says that the present notes remain legal tender and should not be rejected as a means of exchange for the purchase of goods and services. “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” – Emefiele.

Emefiele pledges that the interest of rural bankers will be protected in the transition from existing to new currencies. The new currency will have a positive impact on inflation.

Emefiele added that the redesigned currency will help Bank’s drive to deepen cash-less policy and complement increased minting of eNaira.

Related: 4 Ways to Make Time for an Extra Income Job

Did The New Naira Followed Due Process?

The central bank of Nigeria (CBN) while responding to the above question on social media insists the move followed the law, due process for Naira redesign, says exercise is 12 years overdue.

Added that Management of the CBN, in line with provisions of sections 2(b), 18(a), and 19(a)(b) of the CBN Act 2007, had duly sought and obtained the approval of President Muhammadu Buhari in writing to redesign, produce, release and circulate new series of N200, N500, and N1,000 banknotes.

The CBN urges Nigerians to support the currency redesign project which is in the overall interest of every citizen of the country. The hoarding of significant sums of banknotes outside the vaults of commercial banks should be discouraged by anyone who means well for the country.

The New Naira Note Reactions on Twitter 

Bright chimezie humble:

My question is, “Is this “standard practice” mandatory? Nigeria has a lot of issue to tackle for now. This project will cost the country a huge fortune and will directly or indirectly negatively affect the poor masses.

Ifreke Bassey:

It’s not important at this time. Economy is poor by you guys mismanagement of policies.

Ascrazy:

Can solved, insecurity everywhere and the so called Naira keep falling everyday
Instead of solving this problem you want to redesign a mere paper shame to the people that called themselves Nigeria government
Now I believe I don’t have a leader.

Kingsley Moghalu

I fully support the cenbank redesign of the Naira. If 80% of bank notes in circulation are outside the banks, that’s troubling. The CBN obviously wants to force all those notes back into the banking system.

Those with the notes must surrender to get new ones or else it becomes illegal tender after January 31 2023. This is also a way to withdraw currency from circulation, an unorthodox way of tightening the money supply since the country is battling high inflation.

The flip side is that people who are holding huge amounts of cash outside the banking system for nefarious reasons will go the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.

I doubt it will solve inflation because there also are other major reasons for inflation such as the forex crisis, which this new move could exacerbate, as well the impact of the security crisis on food price inflation.But overall it is a necessary step.

I just think the time window for its implementation is rather short. This will put a lot of operational pressure on commercial banks and the financial system in general.A 90 day window would have been better, but one can understand the need to avoid interfering with the elections.

Reactions on Facebook 

Auwal Musa Zaranda:

May Almighty Allah continue to bless the management of CBN for this wonderful initiative, I believe this will go a long way for reducing the number of vote buying in the next general election come 2023 . Only unpatriotic citizens can criticize the idea of the central bank.

Smart Honda:

I spot the motion and I agree with you sir, so also the creation and innovation system to Nigerians is very important is only few Nigerians who will understand the new redesign of our currency. God bless you Godwin emefele nd other members who gather to make our dear country great again.

Suleiman Umar:

The fact is that corruption will not allow any policy to achieve in this country. Even if the objective is to tackle inflation due to insecurity and politicians same corrupt bank staff will change those cash with them with the new notes. In the end, only the poor will suffer the consequences of the policy for not meeting the date.

Numerous issues in this country brought about businessmen not fully appreciating the use of banks due to criminal bank staff, scammers, and yahoo boys’ activities as many are victimized. They prefer to keep cash and used them anytime without difficulty in operating a bank account.

James Williams:

As an Economics student, I think that the redesigning of our currency note isn’t so much of a bad idea though if the cost isn’t preposterous.

1. Reportedly, 4 out 5 currency notes currently in circulation aren’t from the bank vaults. Well, that’s a huge problem for the CBN that enacts its monetary policies by tinkering with the vaults. For instance, to reduce the money in circulation during inflation, the bank opts to increase the cash reserve ratio of commercial banks (eg. In September it was increased from 27.5% to 32.5%) – so the commercial banks will have to “reserve” more money in its vault or give them to the central bank. So, what happens when the money in circulation isn’t with the bank? Chaos.
2. The increased likelihood of successful counterfeiting incidences. I think it is against this backdrop that Central Banks are advised to redesign their notes in about an 8-year interval. We’ve not done this in almost 20 years. Lmao. So, it isn’t much of a bad idea to implement it now, especially as the positive perception of Meffy and his CBN is pretty much at almost an all-time low.
3. Getting more of the notes into the bank vaults could be really a plus for currency management. The contractionary policy enactment could be a lot more efficient to the extent that the goals of the redesign is successful. More of a sequel to point 1.
4. The check on the launderers, hoarders, the kidnappers and some of the negative financial actors could be another plus. Though the cynicism can be sustained that these folks probably have the means to stay in the game regardless – one way is that quickly converting their stash to foreign currencies. We will see how that turns out.

There are some positives definitely. No doubt that Meffy though has got a pretty unglamorous outing James William added.

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