New Telegraph

February 23, 2024

CBN spends N281.08bn on banknotes in 5 years

Earns N6.50bn from currency mgt in 2020

The Central Bank of Nigeria (CBN) spent a total of N281.08billion to print banknotes between 2016 and 2020, the 2020 annual report of the apex bank’s Currency Operations Department (COD) shows. According to the report, which was posted on the CBN’s website yesterday, the regulator incurred a total cost of N58.62billion on printing of banknotes in 2020 compared with N75.52billion in 2019, indicating a decrease of N16.91billion or 28.84 per cent. The report further shows that while the CBN spent N33.37billion on printing of banknotes in 2016, the amount increased to N49.52billion and N64.04billion in 2017 and 2018 respectively. This means that the apex bank incurred a total cost of N281.08billion on printing of banknotes from 2016 to 2020. Specifically, the report stated that the CBN incurred a total of N67.21billion, as expenses, on currency operations in 2020, representing a decrease of N17.96 bil-lion or 21.08 per cent, below N85.18billion in 2019.

The report said: “The currency indent approved for 2020 was 2,518.68 million pieces, consisting of various banknote denominations with a value of N1,063.04 billion, compared with 3,830.94 million pieces valued at N1,340.70 billion in 2019. “This indicates a decrease of 34.25 per cent and 20.71 per cent in terms of volume and value respectively. NSPM PLC was awarded the production of the entire indent, and at end-December, 2020, 100 per cent of the indent had been delivered.” It also stated: “The sum of N4.59billion was incurred on currency distribution in the period under review, compared with N5.92billion in 2019,” adding that “the 22.50 per cent reduction in cost was a result of reduced movement due to the COVID- 19 restrictions during the period under review.”

However, the report shows that the CBN generated the sum of N6.50billion as total income from currency management activities in 2020, compared with N13.24billion in 2019, representing a decrease of N6.74billion or 50.92 per cent. The income generated was largely, from penal charges on unsorted banknotes deposited by DMBs and charges for authentication of foreign currency deposits with the apex bank, the report stated. On foreign currency, the report said that the CBN engaged Travelex Nigeria Limited, Innovate 1 Pay Limited and CFS Limited to procure and distribute foreign currency in 2020.

It stated that the firms procured a total of $1.83billion last year, representing a decrease of $2.12billion or 53.67 per cent, compared to $3,95billiion in 2019. “In addition, the sum of $4,889.40 million was utilized for BDCs operations/ interventions and $587.81 million for payment to MDAs and other approved foreign currency expenses. “In total, the sum of $5,477.21 million, £1.21 million and EUR0.52 million were sold in 2020 against $13,487.00 million, £4.58 million and €1.69 million sold in 2019. The decrease in sales reflected the impact of COVID-19 on business activities and reduction of weekly BDC market days from four to two,” the report said. Also, the report stated that Currency-in-Circulation (CIC) increased by 19.06 per cent from N2.441 trillion at end December, 2019 to N2.907 trillion at end- December 2020, adding that “the growth in CIC reflected the continued dominance of cash in the economy. Analysis of the CIC shows that a greater proportion was in higher denomination banknotes (N100, N200, N500 and N1000).”

“The higher denomination banknotes together accounted for 63.47 per cent and 98.08 per cent of the total CIC, in terms of volume and value, respectively. The volume of lower denomination banknotes (N5, N10, N20, N50), accounted for 28.43 per cent of the total CIC and 1.92 per cent, in terms of value as at end-December 2020.” On counterfeit notes, the report showed that a total of 67,265 pieces of counterfeit notes with a nominal value of N56.83 million was confiscated in 2020, indicating a 20.80 per cent decrease in volume and 12.18 per cent decrease in value, compared with 84,934 pieces valued at N64.71 million in 2019. It said: “The Global standard for the number of counterfeit per million is 100. The ratio of counterfeit notes to volume of banknotes in circulation was 13 pieces per million in 2020, compared to 20 pieces per million banknotes in 2019. The N1000 and N500 denominations constituted the most counterfeited, accounting for 69.06 per cent and 30.79 per cent, of the total counterfeit notes in 2020, respectively.

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