Yesterday, the Central Bank of Nigeria (CBN) announced the introduction of newly redesigned N200, N500, and N1,000 banknotes. This announcement was seen as the start of a larger currency census and the elimination of black money.

Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN), said during a virtual news conference that the vast amounts of money—an estimated 80% of all money in circulation—that are not in the banking system are a source of concern.

According to Emefiele, as of September 2022, N2.73 trillion of the N3.23 trillion in money in circulation was not stored in commercial banks' vaults.

He added that the amount of money in circulation has increased by more than twofold since 2015, going from N1.46 trillion in December of that year to N3.23 trillion in September 2022.

He continued by saying that in order to solve the "daunting issues" related to cash management and stop currency counterfeiting, the decision was required.

“These (currency management) challenges primarily include significant hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation are outside the vaults of commercial banks; worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability and increasing ease and risk of counterfeiting evidenced by several security reports.”

Experts have described the action as being a part of a larger effort to restrict excessive election expenditure and remove black money from the system beneath the surface of problems with currency management.

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