by Oke Efagene

The Central Bank of Nigeria (CBN) has revealed plans to create a new generation of naira notes before the second quarter of next year, 2014.

This development was made known by the Deputy Governor, Operations, CBN, Tunde Lemo.

Lemo, however, said that the apex bank had previously made it known to the public that it would change the current polymer notes to paper, but all notes in circulation would be withdrawn at the same time.

Nigerian Tribune reports:

“Nigerians will be having new generation notes in paper in the next few months. We will wait until the notes wear and tear. When they wear, and they travel back to Central Bank, of course they will be re-issued,” he stated.

According to him, the life cycle of a note in Nigeria is between six months and a year and if CBN took that decision six months ago, “I reckon that in the next three to six months you will begin to see these denominations re-appear in paper.” Lemo had in 2012 defended the bank’s plans to stop the printing of lower denominations of the naira in polymer and revert to paper currency because the former reportedly fades too much, making the notes unsuitable for circulation.  

He then promised that by the middle of last year, the Central Bank would have started producing the lower denomination notes in paper not in polymer. But due to logistics challenge, the plan was not accomplished. “My plea is that Nigerians should be patient with us. It wasn’t the fault of the CBN; it is just because we have to go back to the drawing board. We will correct that in the course of the year. Polymer certainly will be phased out. In fact, no new note is being printed in polymer now,” said Lemo.

On the scarcity of the lower denomination notes, Lemo blamed inflation and commercial banks for what he called “low transactionary value” and “poor circulation,” respectively. “For the lower denomination, well, I think the banks are really the ones that are really not allowing the lower denomination in circulation, largely, because of the cost and carrying value.  Most people don’t require small denomination. But for buying things in the market, if you look at the veracity, you find out that it is the people that are losing interest because of its bulkiness and inflation,” he said.

Lemo has urged law enforcement agencies to arrest all illegal hawkers of new naira notes. He also called on commercial banks to keep watchful eyes on their staff to avoid being used as conduit for illegal transfer of new notes to unauthorised hands. He said this should be done to ensure effective protection of the currency from abuse.