On Wednesday, the Central Bank of Nigeria (CBN) said that it plans to launch redesigned local banknotes by Dec. 15, a move aimed at controlling the supply of the Nigerian naira -- the local currency of the most populous African country.
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CBN Governor Godwin Emefiele said that the move became necessary as currency management in the country has recently faced several daunting challenges which continued to grow in scale and sophistication with unintended consequences.
At least 80 percent of the local currency in circulation is outside the vaults of commercial banks, he said, noting that this was due to significant hoarding of banknotes by members of the public.
The central bank chief also listed among the challenges the worsening shortage of clean and fit banknotes as well as the increasing risk of counterfeiting evidenced by several security reports.
"Indeed, recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting, especially at the higher denominations of 500-naira and 1,000-naira banknotes," he said.
The Nigerian naira has not been redesigned in the past 20 years, although the global best practice is for central banks to redesign, produce and circulate new local legal tender every 5 to 8 years, Emefiele said.
Nigerian President Muhammadu Buhari had already approved the redesigning, production, and circulation of new series of banknotes at 100, 200, 500, and 1,000 naira levels, he said, explaining that following the official release of the new banknotes in mid-December, the existing notes would seize to be regarded as legal tender by Jan. 31, 2023.
The official also urged citizens to proceed to the banks to deposit their existing banknotes in exchange for the newly designed notes