Printing banknotes costs CBN 28% less
By Jeph Ajobaju, Chief Copy Editor
A huge 2.518 billion pieces of new naira notes worth N1.063 trillion were printed by the Central Bank of Nigeria (CBN) in 2020 at a cost of N58.618 billion.
Printing cost decreased by N16.905 billion (28.8 per cent) compared with N75.523 billion in 2019. It cost N64.040 billion in 2018, as contained in the “2020 Currency Report” posted on the CBN website.
The CBN said it has upgraded its Cash Activity Reporting Portal (CARP) which transmits currency management data from the financial industry to the Nigerian Inter-Bank Settlement System (NIBSS), leading to less paper money usage.
“The total cost incurred on printing of banknotes in 2020 amounted to N58,618.50 million, compared with N75,523.50 million in 2019, indicating a decrease of ₦16,905.00 million or 28.84 per cent,” the CBN added.
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The CBN said the notes were printed by the Nigerian Security Printing and Minting (NSPM), “the sole printer of the Nigerian legal tender currency. The [CBN] as a major investor holds 89.52 per cent of the shares in the company.”
The NSPM has capacity to produce four billion pieces of banknotes a year.
A total 2.52 billion pieces of banknotes were produced in 2020 against 3.05 billion in 2019, a decrease of 529.31 million pieces (17.37 per cent) “on account of lower Bank’s currency order volume for the year,” the CBN said, per Nairametrics.
Reduction in production cost
Vanguard reports that CBN Governor Godwin Emefiele has been driving the cashless policy to cut the cost of printing banknotes and cash management. The new e-Naira was introduced in line with the policy.
The CBN explained that it “approved an indent of 2,518.68 million pieces of banknotes of various denominations in 2020 to satisfy the currency needs of the economy, compared with 3,830.94 million in the preceding year.
“The NSPM Plc was awarded the contract for the production of the entire indent. At end-December 2020, NSPM Plc had delivered 100 per cent of the approved indent.”
The CBN put the total stock of currency (issuable and non-issuable) in the vaults of the bank at end December 2020 at 2.747 billion pieces, compared with 2.641 billion in 2019, an increase of 105.73 million pieces or 4.00 per cent.
“At end-December, 2020, the total issuable notes (newly printed notes and Counted Audited Clean notes) was 592.94 million pieces, compared with 726.43 million pieces in 2019, representing a decrease of 133.49 million pieces or 18.38 per cent.”
Foreign exchange (forex)
The report said $1.830 billion (forex) was procured in 2020.
“This value represents a decrease of USD 2,120.00 million or 53.67 per cent relative to the USD 3,950.00 million procured in 2019.
“This was used to fund Bureaux De Change (BDC) operations, payment of estacode and Personal Travel Allowances (PTA) to Ministries, Departments and Agencies (MDAs).”
The receipt and authentication of foreign currency deposits by Deposit Money Banks (DMBs) reduced significantly due to the downturn in global trade in 2020, according to the report.
Currency in circulation
Currency-in-Circulation (CIC) rose 19.06 per cent from N2.441 trillion in December 2019 to N2 .907 trillion in December 2020.
“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.”
Currency processed
A total 173,585 boxes of banknotes valued at N980.758 billion were processed in 2020 compared with 260,651 boxes worth N1. 533 trillion in 2019, a decrease of 33.40 per cent in the number of boxes or N552.971 billion.
Decrease in counterfeit notes
The CBN said it confiscated 67,265 pieces of counterfeit notes valued at N56.83 million in 2020, a decrease of 20.80 per cent in volume and 12.18 per cent in value against 84,934 pieces valued at N64.71 million in 2019.
“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.
Denominations most counterfeited in 2020 were N1,000 (69.06 per cent) and N500 (30.79 per cent), the CBN said.
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