Years after spending millions of Naira on campaigns and migration of the nation's currency from paper prints to polymer notes, the Central Bank of Nigeria (CBN) has announced that it is ready to stop the printing of small denomination naira in polymer notes.
The notes were introduced by the Central Bank of Nigeria (CBN) when Prof Charles Chukwuma Soludo was the governor. They replaced paper notes. A note-printing firm – Securency, partly owned by Reserve Bank of Australia, was contracted in 2006 to produce the notes. It cost the Federal Government some N750 million.
The deputy governor, banking supervision Mr Tunde Lemo, in a statement on Sunday said the apex bank decided to scrap the polymer notes because they fade easily, despite earlier experiments which showed that the notes could last longer than paper notes.
"By the middle of the year, we will start to produce the second generation of lower denomination notes, now in paper not in polymer," he said yesterday in Washington on the sideline of the ongoing Spring Meeting of the World Bank and the IMF.
"My plea is that Nigerians should exercise patience with us; it wasn't the fault of the CBN, it was just because we had to go back to the drawing board to rethink 'Project Cure' in the light of the wish of the public that we should not go ahead with the N5000 notes and lower denomination.
"We will correct that in the course of the year. Polymer certainly will be phased out. In fact, we are phasing out polymer. No new note is being printed in polymer now."
Lemo said that when the CBN was going to introduce the polymer currencies, its search showed that they could last longer than ordinary paper notes.
"So, part of 'Project cure' actually was actually to move away from polymer substrate to paper, unfortunately we had a push-back because of the issues around N5000 note and coins. The entire program was put in abeyance, otherwise by now we should have stopped producing polymer," he said.
Lemo said the CBN had awarded a contract for the printing of the higher denomination notes to a foreign company because of low capacity at the Nigerian Security Printing and Minting Company.
He said the CBN would begin to receive the fresh notes from June.
On the campaign on the careful handling of the naira, Lemo said that it was unfortunate that the campaign was not successful, but noted that it was a criminal act to abuse the naira going by the CBN Act.
"Unfortunately, CBN is not a law enforcement institution; we left that in the hands of the law enforcement institutions and that has not kicked in," he said. "I still go to parties and see people spraying money, stepping on money, I see touts distributing mint-fresh money that should go to customers."
Lemo also said the CBN had talked to the police to step up its surveillance to reduce the abuse of the naira adding that the bank had no right to arrest people who sold the naira on the streets.
He said the act of abuse and sale of the naira by touts had defeated the clean note policy of the bank, but assured that efforts were being made to tackle the problem.