Existing currency expiration: CBN’s deadline shocks politicians, shatters 2023 election cash for vote plans
…Says 85% existing currency notes hoarded in private custody
…Release of re-designed Naira notes to commence in December
…Advancement in printing technology made counterfeiting notes easier
…Redesigning to curb counterfeit notes, hamper ramson payment to terrorists, kidnappers – Apex bank
By Idris Bakare
The Central Bank of Nigeria (CBN) may have cut politicians unawares by its deadline on the circulation of existing current Naira notes which is set to seize from circulation on January 31, 2023.
The Apex bank on Wednesday announced that it would release re-designed Naira notes by December 15, 2022.
In a press briefing on Wednesday, the Governor, Central Bank of Nigeria (CBN), Godwin Emefiele said that it has recorded significantly higher rates of counterfeiting Naira denominations, which according to him, was aided by recent development in photographic technology and advancements in printing devices in the Country.
He expressed worries that 85 per cent of the currency in circulation is being hoarded by Nigerians.
This position of the CBN is supported by financial analysts that claimed that politicians in public and private sectors have been hoarding Naira notes to finance 2023 general elections. They pointed out that several states hoarding currencies are owing contractors and civil servants.
Emefiele explained that the redesigning of Naira notes would help to curb counterfeit notes, as well as hamper ramson payment to terrorists and kidnappers.
According to him, “As you all may be aware, currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007. Indeed, 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.
“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 N500 and N1,000 banknotes.
“In line with this approval, we have finalised arrangements for the new currency to begin circulation from December 15, 2022.
“The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.
“Accordingly, all Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately.
“The newly designed currency will be released to the banks in the order of First-come-First-serve basis.
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them withdraw the new banknotes once circulation begins in mid-December 2022.
“All banks are therefore expected to keep open, their currency processing centers from Monday to Saturday so as to accommodate all cash that will be returned by their customers,” he directed.
However, Emefiele has ordered bank to suspend bank charges for cash deposits with immediate effect.
He said present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.
“We would like to use this opportunity to reassure the general public that 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.
“For the purpose of this transition from existing to new notes, bank charges for cash deposits are hereby suspended with immediate effect. Therefore, DMBs are to note that no bank customer shall bear any charges for cash returned/paid into their accounts.
“Members of the public are to please note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services,” he noted.
Meanwhile, the January 31st deadline set for the current Naira notes to seize from being legal tender as declared by the Apex bank has been observed to be a shot against 2023 general elections politicking.
The development analysts have observed may be a straight shot to shatter vote buying tendencies as the Apex bank stated 85 percent of Naira currencies presently in circulation have been hoarded in private custody.
Nigerian elections have been known to be coloured with vote buying, a phenomenon which the Independent National Electoral Commission (INEC) has frowned against, making effort recently to arrest and prosecute culprits found wanting in recent gubernatorial elections, including those of Ekiti and Osun States.
With the termination of the currently circulating Naira notes 85 per cent of which have been hoarded in private custody, the fate of politicians who have hoarded the notes for election expenses, particularly for cash buying might have been shattered.
Analysts who noted the development may be an indirect shot against political money bags, pointed at the bottlenecks placed before politicians who have hoarded the currencies to get them changed before the January 31, 2023 deadline.
