Deputy Governor, Operations, CBN, Mr. Tunde Lemo
The Central Bank of Nigeria (CBN) at the weekend shed more light on the proposed currency restructuring, saying that it resolved to discontinue printing the naira in polymer notes so as to take away the monopoly of printing the currency from the Australian firm - Securency International Pty Limited.
Deputy Governor, Operations, CBN, Mr. Tunde Lemo, said this in an exclusive chat with THISDAY.
The deputy governor explained that as a result of the monopoly, the apex bank was always forced to pay whatever amount the firm charges.
Lemo also pointed out that there are a lot of environmental issues surrounding the polymer banknotes.
The N5, N10, N20 and N50 banknotes were redesigned to polymer notes at various times between 2007 and 2009 respectively.
However, under the proposed new currency structure expected to be officially launched early next year, the existing denominations of N50, N100, N200, N500 and N1, 000 are to be redesigned with added security features. A 12-new-currency structure is expected to emerge at the end of the exercise. That is: 50K, N1, N2, N5, N10 and N20 in the coin category, while N50, N100, N200, N500, N1000 and N5000 will be banknotes.
Lemo explained: “Securency is the only producer of polymer currency in the world and so the CBN has been resorting to single sorting for banknote. This we think is not good for the country.”
Continuing, he said: “Even though the plan is to coin N5, N10 and N20, the N50 note will be converted to paper currency. However, if Nigerians show preference for retaining the N5, N10 and N20 in banknotes instead of coins, it shall no longer be in polymer.”
According to him, although polymer currency last longer, the ink used in printing it fades away easily.
“The destruction of banknotes made of polymer has proved to be a challenge in Nigeria from an environmental perspective. Briquetting (destruction of unfit banknotes) of polymer is not always easy because it is made of polythene and emits substances that are not environmentally friendly,” he added.
Lemo also stated that another reason to do away with polymer notes was as a result of the scandal handing on Securency’s neck. This to him cast doubt on the integrity of the Australian firm.
Director, Corporate Communications Department, CBN, Mr. Ugochukwu Okoroafor, last week pointed out that unlike in the past whereby printing firms held the patent and right to produce the naira the currency restructuring would make the CBN hold the patent of the new set of currencies that would emerge from the process.
“We need to take back all our patents and right. Right now, some of the patents and right do not belong to Nigeria or the CBN. We had a rude shock when that became an issue when we wanted to print a particular setof notes. So we are using this exercise to take back that right. If it belongs to Nigeria, nobody will hold us to ransom,” he explained.
According to Okoroafor, the proposed introduction of a higher denomination of banknote would enable the apex bank save about N7 billion out of its annual cost of printing currency.
The CBN’s spokesman had also faulted reports that the apex bank would spend N40 billion on the currency review, saying “that is an absolute lie.”
Okoroafor added: “Every currency gets reviewed once in a while. Right now, the United Kingdom is reviewing its currency. So currency review is something that we must do. As a monetary authority, it is our responsibility enshrined in the CBN Act 2007.”