CBN Destroys Over N6tn Banknotes Under Buhari

The Central Bank of Nigeria is expected to have destroyed over N6tn worth of mutilated and old banknotes when the regime of the President, Major General Muhammadu Buhari, (retd) expires in May 2023, an analysis by The PUNCH has shown.

Already, data obtained from the annual reports of the currency operations department of the CBN between 2016 and 2020 showed that the apex bank destroyed mutilated banknotes worth N4.1tn during the five-year period. Our correspondent could not readily obtain data on the amount of mutilated banknotes disposed off by the central bank in 2021 and 2022 as of press time on Sunday.Punchng.com report

However, the central bank is expected to destroy over 80 per cent of the N3.23tn banknotes currently in circulation as a result of its decision to redesign N100, N200, N500, and N1, 000 bills.

The move will bring the total amount of naira notes destroyed by the current administration to at least N6tn.

The CBN Governor, Godwin Emefiele, announced on Wednesday that the bank would release re-designed naira notes by December 15, 2022.

Emefiele made this announcement during a special press briefing in Abuja where he gave reasons for the move.

According to the CBN governor, the move is aimed at controlling currency-in-circulation as well as curbing counterfeit currency and ransom payments to kidnappers and terrorists.

Meanwhile, a breakdown of the CBN data for the 2016-2020 period showed that in 2016, the apex bank destroyed the sum of N829.94bn in mutilated notes. In 2017, the sum of N977.23bn in mutilated banknotes was again destroyed by the CBN. The years 2018, 2019 and 2020 saw the destruction of N814.59bn, N814.44bn and N698.59bn banknotes, respectively.

Destruction gulps N3.88bn

In a related development, further findings showed that N3.88bn was spent by the CBN to destroy the N4.1tn mutilated banknotes disposed off between 2016 and 2020.

This followed an expenditure of N1.43bn spent on currency disposal in 2016, while the succeeding years of 2017, 2018, 2019 and 2020 witnessed currency disposal costs of N594.6m, N662.2m, N647.8m and N538.5m, respectively.

The development came as some stakeholders continue to criticise the CBN over the plan to redesign the naira notes.

However, experts are divided over the move with some saying the action would worsen inflation.

Speaking on the amount of money spent by the apex bank to destroy old notes as well as the potential cost of printing the new naira notes that will take effect by December 15, 2022, a former Assistant Head of Research at the CBN, Professor Jonathan Aremu, faulted the decision of his former employers.

He said, “Changing of currency notes is not an essential monetary policy tool. Our CBN is part of politicians, so people may read this intention as political geometry for hidden reasons. I am yet to be convinced of the basis for this. Buhari did this in 1985 under his military regime, to do the same again under democratic governance is not clear.

“Some people have said it is part of monetary recklessness and prodigality since it will give opportunity for huge contract and expansion of money supply amid an inflation crisis being faced by the country.” Get the balance From Punchng.com