All Questions About The Nigeria’s New Currency Notes Answered
In a transformative step towards restructuring the economic landscape, Nigeria unveiled a redesigned set of currency notes in 2022. This introduction has ignited interest and prompted a multitude of questions from the public. This article delves into the nuances of Nigeria’s new currency, answering twenty questions and offering a comprehensive insight into this monetary evolution.
1. Why redesign the naira notes?
According to the CBN, data has shown a large volume of banknote hoarding by the public, which has led to a shortage of clean and fit banknotes. Increase in the rate of
counterfeiting country and the long span of redesignation of naira notes, which, according to practice, should be undertaken every 5 to 8 years
2. What denominations are included?
Only three of the current eight denominations were redesigned, namely the ₦200, ₦ 500, and 1000. Other banknotes (5, ₦10, ₦50, and 100) maintained their old designs and features.
3. How do the new notes differ from the old ones?
According to CBN, the new Naira notes prioritize currency integrity through advanced security features. Raised prints aid tactile recognition, a subtly designed security thread ensures authenticity, and UV light reveal transformative serial numbers. These measures, in addition to embossed elements, create a robust defence against counterfeiting, fortifying the currency’s security.
4. When were the new currency notes launched?
The former president, Mohammadu Buhari, launched the new notes on November 23, 2022, in a low-key celebration. A launch with the CBN governor, stakeholders, and dignitaries in attendance was a success.
5. Are the old notes still legal tender?
The redesigned ₦200, ₦500, and ₦100 notes circulated side by side with the old ₦200, 500, and 100 notes until the last day of the year 2022. So, the old banknotes remained legal tenders until December 31, 2022.
The old notes ceased to be legal tender in January 2023 until after the general election held in March of the same year.
6. How Did Nigerians Dispose of Their Old ₦200, ₦500, and ₦500 Currency Notes?
Citizens’ primary option was to visit their banks in any part of the country to exchange the old notes for the new ones. However, the CBN encouraged those with bank accounts to go get it for themselves, as there was no going back on the project. Residents in rural areas can also visit any CBN-accredited agents to deposit the old notes.
7. Was there a limit to how much an individual or company could deposit?
The Central Bank of Nigeria did not place any cap on the amount an individual or corporate body could deposit at the time. It encouraged the people to deposit all the old ₦200, ₦500, and ₦1000 notes in their possession.
8. Were bank charges applied to the deposits of old naira notes?
Absolutely no. Part of the measures designed to ease the rollout process was the CBN’s suspension of charges on cash deposits until January 31, 2023.
8. How were tight-scheduled citizens able to change their old currency notes?
Nigerians with tight schedules during the week weren’t lucky, but the CBN instructed all their branches and some selected branches of some commercial banks to open Monday through Saturday so we could all change our old naira notes.
9. Was there any new inscription in the redesigned note?
The Central Bank of Nigeria didn’t have a new design jersey, so there were no new inscriptions on the new naira notes.
10. Did Nigerians get a cash exchange for their deposits?
According to the CBN, there was no outright cash exchange of new notes for the old ₦200, 500, and 1000 notes. However, the apex bank encouraged Nigerians to use alternate options, such as POS, USSD, internet banking, and mobile money operators, for daily transactions.
11. Were there alternative channels for making payments?
Although insufficient, we had alternate options such as the Mobile Payment Service Banks, eNaira, Point-of-Sale, mobile apps, and others to transact.
12. What are the benefits of the currency redesign?
According to the CBN, introducing the new currency notes will help curb counterfeiting. The design is also expected to strengthen the economy, reduce expenditure on cash management, promote financial inclusion, and enhance CBN’s visibility of the money supply.
12. Was the redesign a political move?
The redesign wasn’t political and was not a weapon to attack any individual or group, but an instrument of change for the benefit of all citizens.
13. Why did CBN wait until the 11th hour before redesigning?
The redesign was long overdue if we followed international best practices for currency redesign. The lifespan of a currency design is between five and eight years, which the then-old notes have exceeded.
14. How did the central bank manage the transition?
The rollout of Nigeria’s new naira notes initially faced resistance from some, leading to scarcity issues and disruptions in Abuja. The banking union’s directive for workers to stay home in targeted states heightened tensions, sparking protests and violence. Persistent shortages fueled discontent amid the approaching presidential election, necessitating enhanced security measures.
16. What steps are taken to prevent hoarding?
The Central Bank of Nigeria (CBN) is tackling the hoarding and counterfeiting of the new naira notes, urging public reporting and threatening sanctions on banks. Economists advise controlled circulation with limited supply for higher denominations and easy access to lower ones. Redesigning and issuing new currencies addresses counterfeiting and hoarding concerns.
17. Can I exchange old notes for new ones at any bank?
Yes, the CBN has provided guidelines for exchanging old notes for new ones, and this process is accessible via authorized banks.
However, as of November 21 2023, the new banknotes are scarce, even in banks.
18. Will the redesign of the currency curb inflation?
The CBN has affirmed that the new notes will stabilize inflation expectations, boost public trust in the naira, facilitate seamless conversion to major currencies, and counter the trend of currency depreciation. However, the reverse has been the case, as the naira is at its lowest point.
19. What lessons can other countries learn from Nigeria’s approach?
An aggressive approach to currency redesigning and an unprofessional rolling-out strategy are suicidal and harmful to any economy.
20. What lies ahead for Nigeria’s currency landscape?
Given that the outcome of the new currency redesign has diverged from expectations in terms of inflation, the future for Nigeria appears uncertain. The nation may need to reassess its economic strategies and consider potential adjustments to address the challenges and unexpected effects.