Why CBN is yet to print new small denomination currencies

Why CBN is yet to print new small denomination currencies

More facts have emerged on why the Central Bank of Nigeria (CBN) has stopped its subsidiary, the Nigeria Security Printing and Minting (NSPM), from printing lower denominations of the naira since 2015 despite the scarcity of N50, N20 and N10 in circulation.

An insider told Ripples Nigeria that a disagreement within top ranking officials of the two establishments over cost implications of printing the lower currency locally is the major issue at stake.

It was gathered that it costs about N60 to print a polymer note in Taiwan, while it will cost about N50 to print its paper equivalent, but CBN and NSPM are yet to agree on how to resolve this.

“Two issues are involved here, whether the polymer product of the lower currencies should be retained or a proposal for its reversal to paper is now adopted. There is also the fact that printing of the polymer is to be contracted outside the country with its cost implication to the economy in recession to cough out about N2 billion for such exercise being the main issue yet to be resolved.

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“You can see new prints of other denominations, includingN200, N500 and N1,000, because NSPM has the templates for them, unlike the lower currencies,“ a senior official disclosed.

An economist, Sylvester Afolabi said no economy desirous to grow plays with lower denomination of its currency.

He put it thus: “The high rate of inflation in Nigeria today is because of the inability of policy makers to factor lower denomination currency as a means of exchange, otherwise why should the N1 and the kobo only be retained as a mere calculation instrument without any purchasing power, unlike what happens in other economies, including those in Africa.”

Though the CBN spokesman, Isaac Okorafor, said there was no deliberate act to stop printing of smaller denominations in the country, he refused to state reasons for the circulation of old and torn notes of the lower currencies.

He said that rough handling of the currencies could be largely responsible for their poor state, without necessarily meaning that they were old.

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