CBN spends N74bn to redesign naira in 12 months as naira appreciates by 15% against dollar

The Central Bank of Nigeria (CBN) and its subsidiary has spent about N74.84 billion to print and roll out currencies, including the controversial new naira notes in 2022.

The CBN in financial statements recently issued said it spent 40.42% more than the N53.39 billion it spent in the preceding year to print new currencies in 2022.

The amount is despite the cash scarcity that plagued Nigeria in the latter part of 2022 and early 2023.

Defining currency issue expenses, the bank said, “Currency issue expenses relates to expenses incurred in relation to the printing, processing, distribution, and disposal of currency notes. This is recognised at cost when incurred.”

The cost of sale which equates to the expenses incurred by one of the subsidiaries (the Nigerian Security Printing and Minting Plc in this case) in respect of the production of currency notes and coins was N45.19bn in 2022, an 18.72 per cent increase from the N38.07bn it was in 2021.

It added, “They include cost of raw materials, employee benefit expenses relating to production staff, electricity and diesel expenses, depreciation and repairs and maintenance.”

In 2022, the total amount in circulation was N3.01tn, a 9.47 per cent decline from the N3.32tn that was in circulation in 2021. In 2020, the total cost incurred on printing of bank notes was N58.62bn, a 28.83 per cent decrease from the N75.52bn that was recorded in 2019 according to the bank’s ‘2020 Currency Report.’

In October 2022, the suspended Governor of the CBN, Godwin Emefiele, announced that the bank would release re-designed naira notes by December 15, 2022, and certain denominations of the existing notes would cease to be legal tender by January 31, 2023.

This move led to a cash crunch plague that lasted for months and negatively affected the economy.

The development comes as the naira witnessed a massive recovery against the dollar in the Investors and Exporters (I&E) window on Friday, August 18, 2023.

Per figures from the FMDQ, the naira began trading on the I&E window at N761.82 per dollar before closing at N739 per dollar on Friday, August 18, 2023, with a total turnover of $130.9 million.

The development follows CBN’s restriction of Bureau de Change Operators (BDCs) to a specific rate against the official window when buying and selling FX to customers.

The new order is in a circular issued on Friday, August 18, 2023, and signed by CBN’s Director of Trade and Exchange Department, O.S Nnaji, to BDCs.

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