On February 10, 2023, the Central Bank of Nigeria (CBN) announced that the old Naira notes of ₦200, ₦500, and ₦1000 had ceased to be legal tender in the country. The decision was made by the CBN management to improve the efficiency and security of the nation’s payment systems.
The Branch Controller of the CBN in Bauchi, Haladu Idris Andaza, made the declaration while briefing journalists at the CBN branch in Bauchi. He explained that the CBN was ready to receive all old notes based on certain conditions and criteria.
Customers who possess the old notes are free to come to the CBN to deposit them, as they cannot do so at commercial banks anymore. The CBN management has made arrangements to ensure that customers have a smooth deposit process. Customers can deposit old notes at any CBN branch in all 36 states of the federation, including the Federal Capital Territory (FCT).
Andaza further explained that the customers needed to visit the CBN portal and fill out a form concerning the currency redesign and exchange. After filling out the form, the portal generates a code, which is to be presented to the CBN branch with the money. The form requires the customer to provide all the basic information about themselves, their account details, and the amount they want to deposit.
The process of depositing the old notes requires customers to present the generated code and the old notes. The CBN staff will then verify the authenticity of the notes to avoid receiving fake notes. Andaza warned that there are some fake notes in circulation, and it is vital to confirm the genuineness or otherwise of the money before depositing it.
The move to phase out the old Naira notes is part of the CBN’s efforts to combat currency counterfeiting and improve the country’s payment system. The CBN had introduced new banknotes in 2019 with enhanced security features, making it difficult for counterfeiters to reproduce them.
The CBN had also introduced the Cashless Nigeria Policy in 2012 to reduce the amount of physical cash in circulation and promote electronic payments. The policy aims to reduce the cost of cash-based transactions, improve the efficiency of the payment system, and enhance financial inclusion. The policy has since been extended to all states in Nigeria, except for six states that were granted an extension due to logistical challenges.
The CBN has been working to increase financial inclusion in Nigeria, and electronic payments play a significant role in achieving that goal. The CBN’s goal is to ensure that all Nigerian adults have access to formal financial services by 2025.
According to the CBN, over 60 million Nigerians are still excluded from the formal financial system. The CBN believes that promoting electronic payments will improve financial inclusion by reducing the cost of financial services and increasing access to credit.
The decision to phase out the old Naira notes is also expected to improve the efficiency of the payment system in Nigeria. The use of electronic payments is faster, cheaper, and more secure than physical cash transactions. By phasing out the old notes, the CBN hopes to encourage the use of electronic payments, reducing the reliance on physical cash transactions.
The CBN’s decision to phase out the old Naira notes is a step in the right direction towards improving the efficiency and security of the payment system in Nigeria. The use of electronic payments is an important tool for achieving financial inclusion and reducing the cost of financial services.
The CBN’s efforts to promote electronic payments and financial inclusion are commendable, and it is hoped that the government will support these efforts to ensure a more inclusive and efficient financial system.
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