In 2022, the production and distribution of currencies, encompassing new naira notes, incurred a cost of approximately N74.84 billion for the Central Bank of Nigeria (CBN) and its subsidiary. This financial outlay represents a significant increase of 40.42% compared to the N53.29 billion spent in the preceding year.
Despite the scarcity of the naira that persisted throughout the latter part of 2022, the CBN’s expenditure on currency rollouts surged. As indicated in the recently released financial statements of the apex bank, currency issue expenses reached N29.65 billion in 2022, reflecting a substantial growth of 94.66% from the N15.23 billion expended in 2021.
Defining currency issue expenses, the bank said, “Currency issue expenses relate to expenses incurred in relation to the printing, processing, distribution, and disposal of currency notes. This is recognized at cost when incurred.”
The Central Bank of Nigeria (CBN) has explained that “currency issue expenses” pertain to the costs incurred for printing, processing, distributing, and disposing of currency notes. These expenses are recognized at their actual cost when they are incurred.
The subsidiary company, Nigerian Security Printing and Minting Plc, bore expenses associated with producing currency notes and coins, which amounted to N45.19 billion in 2022. This reflects an increase of 18.72% compared to the N38.07 billion spent in 2021.
It added, “They include the cost of raw materials, employee benefit expenses relating to production staff, electricity and diesel expenses, depreciation and repairs and maintenance.”
During 2022, the total currency in circulation was valued at N3.01 trillion, marking a decline of 9.47% from the N3.32 trillion circulated in 2021. In the year 2020, the cost incurred for printing banknotes was N58.62 billion, representing a decrease of 28.83% from the N75.52 billion recorded in 2019, as documented in the bank’s ‘2020 Currency Report.’
In October 2022, Godwin Emefiele, who was suspended as the Governor of the CBN, announced that the bank would introduce redesigned naira notes by December 15, 2022. As a result, specific denominations of existing notes would lose their status as legal tender by January 31, 2023.
This move triggered a prolonged cash shortage, causing adverse effects on the economy that persisted for several months.
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