The CBN on Wednesday, October 26, 2022, announced plans to redesign 200, 500
and 1000 bank notes to replace the existing ones leaving the five lower
denominations untouched. The CBN Governor, Godwin Emefiele, stated that this
exercise has been approved by President Muhammadu Buhari and that the new
notes would be available for distribution and withdrawal by the public from
Deposit money banks on December 15, 2022. He also informed the public that the
old notes would continue to serve as a legal tender until January 31, after which the
new notes would be legally recognised and used for transactions in the Country.

He hinged the Apex Bank’s decision on the powers conferred on it by Section 2(b)
of the CBN Act 2007. According to Emefiele, currency management by CBN has
faced a number of challenges for some time now. This includes: Significant
hoarding of banknotes by members of the public, with statistics showing that over
80% of currency in circulation are outside the vaults of Deposit money banks. At
the end of September 2022, available data at the CBN indicate that N2.73 trillion
out of the N3.23 trillion currency in circulation, was outside the vaults of Deposit
money banks across the country; and supposedly held by the public. This is an
indicative that Nigerians have not fully accepted the cashless policy of the Central

Other challenges include worsening shortage of clean and fit banknotes, with
attendant negative perception of the CBN and increased risk to financial stability;
Increasing ease and risk of counterfeiting, evidenced by several security reports.
Although global best practice is for central banks to redesign, produce and
circulate new currency every 5–8 years, our existing series of the Naira has not
been redesigned in the last 20 years.
Every single kind of currency is so much more than its value and the things that
it can buy. Each piece is a representation of the nation that it comes from, and
shows the heritage that makes its people proud to be called its own. Currencies
also show how rich the culture of each nation is. With prominent people
displayed on its face, it gives people a gist of what the country has been through
and who played the biggest roles in helping it survive to this day. Different
nations have gone through currency redesigns as they cope through different
changes. This could be a result of changing regimes, policy or of new principles
and beliefs. Regardless of what triggers the change, all this only means one
thing: redesigning an entire set of currencies also spell a change in an entire
nation. (
Although, there s no justification to the CBN not to redesigning the currency as
appropriate. The reason why it must be now is not farfetched especially now that
inflation is soaring. However, the truth remains that this singular “ACT” must
cause some pains to genuine business men, investors, petty traders and rural

The Gains
These as discussed below are the benefits the new CBN currency design:

Security Currency Against Counterfeiting
The idea behind pulling currencies and redesigning them from time to time is an
operational one, and it is all about risk management. Nigeria has a big challenge
with currency counterfeiting, with many such operations all over the country.
Redesigning currencies improve a currency's security by enabling the country to
keep counterfeiting low and stay ahead of counterfeiting threats. The CBN expects
that this move to redesign Nigeria's currency would reduce counterfeiting.
Holding cash is still very popular; in fact, it is not uncommon for traders within
Nigeria to hold hundreds of millions of Naira in cash for their operations. The
CBN claims that it is also redesigning the Naira, due to hoarding with statistics
showing that over 80 percent of currency in circulation are outside the vaults of
Deposit money banks. After the CBN announced the redesign policy, naira notes
that were minted as far back as over a decade ago began to circulate. Photos of the
said naira notes have since gone viral on social media.

Deepening of Cashless Policy
Nigerians embracing cashless transaction would be inevitable with the pegging of
cash withdrawal limit over the counter (OTC) by individual and corporate
organizations per week at N100,000 and N500,000 respectively. CBN also
attached process fees of 5% and 10% respectively to individual and corporate body
for cash withdrawal above such limits. Definitely, the policy would force increased
minting of the eNaira and most transactions to go cashless via various electronic

payment platforms thereby deepening Nigeria’s push to entrench a cashless

Financial inclusion Strategy
One of the gains of the policy is to encourage financial inclusivity. Financial
inclusion means that individuals and businesses have access to useful and
affordable financial products and services that meet their needs – transactions,
payments, savings, credit and insurance – delivered in a responsible and
sustainable way especially those in rural areas. The benchmark on withdrawals
would definitely push banking activities such as agent banking, linkage banking
and financial literacy to the rural community and the unbanked to meet their
banking needs.
Minimizing cost of Currency Management
Other concerns that motivated the decision include the high cost of currency
management. According to Vanguard online publication on November 4, 2021,
The Central Bank of Nigeria spent the sum of N58.618 billion to print 2.518 billion
Naira notes, valued at 1. 063 trillion in, 2020. This was contained in the bank’s
2020 Currency Report posted on its website. It indicated a decrease in the bank’s
expenditure on currency printing, which stood at N75. 523 billion, in 2019 and
N64. 040 billion, in 2018. ( The CBN by
this policy introduction would reduced to a minimal level the cost of retrieving and
disposing of mutilated and dirt currency notes as most transaction would be on e-
payment with less cash to toy with.

Curtailing the Act of Terrorism and Other Criminal Activities

The CBN also believed that with the redesigning of the currency and the new cash
withdrawal limit in place it would drastically reduce the act of kidnapping,
terrorism and other criminal activities. This is hinged on the premises that access to
huge cash would be cut off and other activities through banks could be traced to an
account. The CBN noted that the policy is going to help reduce insecurity, ‘if
money outside the banking vault, used to fund ransom payments and terrorism,
begin to dry up.

Accurate Policy Predictions and Implementations
The CBN also stand a better chance for accurate policy predictions and
implementations for its various monetary and fiscal policy regulations for the
development of the economy when the currencies in circulation are easily
accountable and assessable in the banks. There is no magic to do when a country’s
over 80% cash in circulation are unaccounted for thus, the need for the policy. The
policy will help control the money in circulation and in the long run have
meaningful impacts on the country’s fiscal stabilization.

The Pains
In any given policy there must be an inherent cost that comes with it in the form of
pain to different segments of the community. We will examine the effect of the
Currency redesigning on the Government, and the general public.
The Government
As stated above that the Central Bank of Nigeria spent the sum of N58.618 billion
to print 2.518 billion Naira notes, valued at 1. 063 trillion in, 2020. Many are of the
opinion that if such a huge amount was spent in just reprinting of a few currency
notes one can imagine the cost for replacing the entire 200, 500 and 1000 currency

notes. The amount spent in redesigning, printing and circulating of the new notes
could have been channeled to other critical needs of the economy.

Also, some of the government officials that take delight in reckless displaying and
dishing out of our public fund to their girl friends and relatives in cash would
definitely miss the attraction.

The politicians who are the main culprits in cash and carry business have already
started kicking against the policy. They are used to carrying high notes
denomination which would be less in circulation soon. The cash for kick back and
the ones to bribe the electorates would be difficult to assembled too as the election
draws nearer. Therefore, to the politicians and some government officials the
policy comes with an inevitable pain that should not see the light of the day.

The General Public
Forex crisis has tray the announcement of the policy since October 26 2022. The
prices of foreign currencies especially Dollas has been soaring in the black market
as a result of rush to convert the hoarded cash to foreign currencies. Our appetite
for foreign commodities that resulted in a heavy reliance on the importation of
virtually everything would negatively have a great burden to those that patronize
them. Assessing forex in a high cost would eventually affect the prices of those
Massive depreciation of the naira has been on increase since the
announcement of the policy by CBN. Naira’s decline in the black market
essentially widened the gap between the official rate and the parallel market rate.

The naira crashed to a historical low against one dollar and one Pound Sterling at
N900 and N1000 respectively after the announcement at the black market.
High inflation would likely fall in due to the forex crisis that has been aggravated
by the naira redesign policy, resulting to high cost of goods and services in the
Country. The policy coming in this time of food crises and insecurity especially in
the rural areas where payments for goods are cash dominated would trigger food
shortage. Convincing traders in those areas to accept money transfer to part with
their goods would require a high level of sureties and convictions. The policy to
rural dwellers is a serious pain to battle with.

Nigerians who take pride in spreading cash in occasion would have a rethink as
the policy would have crippled their assess to huge cash to toy with. The penalty
that comes with spreading of the currency if implemented would leave regret to
anyone that fall victim. To them the policy is not a favourable one.

To the kidnappers, Armed robbers, Bandits and other criminal elements the
policy is a bad market to them. Access to huge cash for ransom payment,
extravagant life styles would be cut off. Criminals that specialize in stealing
people’s ATM card to withdraw money will only have N20,000 to withdraw in a
day before the account would be blocked. The policy is indeed a hard blow to

Implication of the Policy to Rural Dwellers
The CBN policy of currency redesign as announced on October 26, 2022 requires
Nigerians to deposit their existing 200, 500 and 1000 naira currency notes with the

banks latest January 31st, 2023 to have access to the new ones. The policy comes
with much implication to the rural dwellers as examined below.

The information dissemination in rural area poses a great challenge as many do
not have access to radio or television as well as electricity. The CBN must find a
way to communicate the new policy on how to change the old notes to the rural
dwellers to avoid being cut off from the impending changes in the policy. The
Community leaders, Religious leaders, government officials from such areas
should be engaged to help in conveying the development to the communities in
their local languages. The Ministry of Information, the media, Telecommunication
via SMS and the National Orientation Agency would also be of help.

The challenge of the unbanked rural dwellers. Most of the population of the rural
dwellers is unbanked and thus excluded from banking activities. The olds notes
according to CBN must be paid into an account to be able to access the new notes.
This would disrupt their business activities which is cash driven.

The CBN must persuade Deposit money banks and microfinance banks to create
their presence in these rural areas through opening of branches or agency banking.
Agency banking can be situated in the house of the prominent leaders of the
communities and in the market places where their banking activities can be
attended to. The community leaders should engage expert to educate them on the
use of USSD, Mobile banking and POS for their payment, deposit and transfer
services. They can open account with agency banks in the community. This policy
should bring an upward review to the deposit and withdrawal limit of tier one and
tier two account while a reference letter from the community heads should be
accepted in place of Utility bill for tier three account.

The CBN redesigning of Naira policy at this time of insecurity, banditry,
kidnapping, food crises, flood disruption with the rural communities at the
receiving end calls for great caution from the side of the CBN. The apex bank must
marshal out appropriate succor to cushion the effect of the policy particularly in the
rural area and in the country generally.