CBN Spends on Naira Notes Printing Largely Misunderstood
Godwin Emefiele, CBN Chief

CBN Spends on Naira Notes Printing Largely Misunderstood

The total amount spent by the Central bank to print Naira notes in 2020 was largely misinterpreted due to some lousy headlines. During the week, some media outlets in the country reported that the apex bank used N58.618 billion to print just N2.518 billion.

In a fact check conducted by MarketForces Africa analyst’s team, the lousy headline happened to be incorrect, though the CBN currency report detailed what the sum was used for.

Without cross-checking the detail, a number of Nigerian citizens have hurled insults while a former lawmaker said, ‘I give up.

The total cost incurred on printing of banknotes in 2020 amounted to N58,618.50 million, compared with N75,523.50 million in 2019, indicating a decrease of N16,905.00 million or 28.84 per cent, the CBN said in the report.

According to the report, a total sum of currency indent of various denominations totalled 2.518 billion notes contracted to NSPM Plc was valued at N1.063 trillion.  In other words, a total sum of N1.063 trillion was printed and it came from 2.518 billion notes of various denominations.

According to the apex bank currency operation department annual report obtained by MarketForces Africa for a review, it has been confirmed that those lousy headlines were misleading and outrightly incorrect.

CBN approved an indent of 2,518.68 million pieces of banknotes of various denominations to satisfy the currency needs of the economy, compared with 3,830.94 million in the preceding year.

The report hinted that the NSPM Plc was awarded the contract for the production of the entire indent, noting that at end-December 2020, NSPM Plc had delivered 100 per cent of the approved indent.

The total stock of currency -issuable & non-issuable- in the vaults of the Central Bank at the end of December of 2020 was 2,747.09 million pieces, compared with 2,641.36 million pieces in 2019, indicating an increase of 105.73 million pieces or 4.00 per cent.

Again, at the end of December 2020, the total issuable notes -newly printed notes and Counted Audited Clean notes- was 592.94 million pieces, compared with 726.43 million pieces in 2019, representing a decrease of 133.49 million pieces or 18.38 per cent at the period.

CBN evacuated a total of 246,236 boxes of banknotes valued at N1,030,689.35 million from the Lagos and Abuja factories of the NSPM Plc to various Branches in 2020, the report added.

The quantum of currency evacuated showed a decrease of 53,046 boxes (17.72 per cent) in volume or N62,543.45 million (5.72 per cent) in value, compared with 299,282 boxes valued at N1,093,232.90 million in 2019.

Furthermore, a total of 711,331 boxes valued at N3,191,239.81 million was moved across the Branches in 2020.

This indicated a decrease of 23.42 per cent and 22.01 per cent in volume and value respectively, compared with 928,852 boxes valued at N4,091,726.98 million in 2019.

FOREIGN CURRENCY The receipt and authentication of foreign currency deposits by Deposit Money Banks (DMBs) reduced significantly due to the downturn in global trade in 2020.

Also, the Bank recorded a significant reduction in the volume and cost of foreign exchange procurement.

A total of USD1,830.00 million was procured over the course of 2020.

This value represents a decrease of USD2,120.00 million or 53.67 per cent relative to the USD3,950.00 million procured in 2019. This was used to fund Bureaux De Change (BDC) operations, payment of estacode and Personal Travel Allowances (PTA) to Ministries, Departments and Agencies (MDAs)

Currency-in-Circulation increased by 19.06 per cent from N2,441.67 billion at end of December 2019 to N2,907.13 billion at end-December 2020. The growth in currency in circulation reflected the continued dominance of cash in the economy.

Analysis of the currency in circulations shows that a greater proportion was in higher denomination banknotes (N100, N200, N500 and N1000).

The higher denomination banknotes together accounted for 63.47 per cent and 98.08 per cent of the total CIC, in terms of volume and value, respectively.

The volume of lower denomination banknotes (N5, N10, N20, N50), accounted for 28.43 per cent of the total CIC and 1.92 per cent, in terms of value as of end-December 2020.

In 2020, a total of 173,585 boxes of banknotes valued at N980,758.00 million was processed, compared with 260,651 boxes of banknotes valued at N1,533,729.00 million in 2019.

This represents a decrease of 33.40 per cent in the number of boxes or N552,971.00 million in value of processed banknotes.

To maintain the integrity of the banknotes in circulation, the Bank, in collaboration with security agencies intensified efforts at curbing incidences of counterfeiting in the period under review.

A total of 67,265 pieces of counterfeit notes with a nominal value of N56.83 million was confiscated in 2020, indicating a 20.80 per cent decrease in volume and a 12.18 per cent decrease in value, compared with 84,934 pieces valued at N64.71 million in 2019.

The Global Standard for the number of counterfeits per million is 100. The ratio of counterfeit notes to the volume of banknotes in circulation was 13 pieces per million in 2020, compared to 20 pieces per million banknotes in 2019.

The N1000 and N500 denominations constituted the most counterfeited, accounting for 69.06 per cent and 30.79 per cent, of the total counterfeit notes in 2020, respectively.

The currency indent approved for 2020 was 2,518.68 million pieces, consisting of various banknote denominations with a value of N1,063.04 billion, compared with 3,830.94 million pieces valued at N1,340.70 billion in 2019.

This indicates a decrease of 34.25 per cent and 20.71 per cent in terms of volume and value respectively. NSPM PLC was awarded the production of the entire indent, and at the end of December, 2020, 100 per cent of the indent had been delivered. #CBN Spends on Naira Notes Printing Largely Misunderstood

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