The Central Bank of Nigeria (CBN) recently announced its intention (having secured approval from the president) to redesign, produce, and circulate new series of the N200, N500 and N1000 banknotes.
Based on this announcement, the apex bank’s new notes would come into circulation on December 15, 2022, and by January 31, 2023, all existing notes shall cease to be legal tender. This suggests that the new notes would replace the old notes in less than two months. According to the CBN, the currency redesign is in response to the risks and difficulties associated with managing the domestic currency. The CBN identified the following challenges: significant hoarding of banknotes by the public, a worsening shortage of clean and functional naira notes in circulation, and the ease and rising risk of currency counterfeiting. Introducing the new notes for the higher denominations is expected to address the earlier identified issues and deepen financial inclusion through increased adoption of the e-naira. While the transition is anchored on appealing objectives, important questions also exist about the policy’s timing and implications on the economy’s stability, given the short duration for the transition and 2023 elections.
