The Central Bank of Nigeria (CBN) Thursday unveiled plans to restructure the naira, the nation's currency, and introduce a new N5,000 banknote denomination into the economy.
Under the proposed new currency structure expected to be officially launched early next year, the existing denominations of N50, N100, N200, N500 and N1,000 are to be redesigned with added security features.
The N1,000 that is the current highest denomination, was introduced into the economy on October12, 2005.
Similarly, the lower banknote denominations of N5, N10 and N20 will now be coined.
CBN Governor, Mallam Sanusi Lamido Sanusi, who unfolded the plan at a press briefing in Abuja, added that 12-new-currency structure would emerge at the end of the exercise, code-named "PROJECT CURE".
These would include 50K, N1, N2, N5, N10 and N20 in the coin category, while N50, N100, N200, N500, N1000 and N5000 will be bank notes.
Sanusi said the introduction of a higher bill would aid the apex bank's cashless policy drive as well as lead to the modernisation of the economy as it would lead to reduction in the volume of currency-in-circulation in the long term.
He described the move as a "befitting currency structure" which would effectively facilitate economic activities in the country.
However, amid concerns that a higher denomination bank note could further worsen inflation, the CBN governor said economies with higher bank note values have had lower inflation rate as at 2010.
He said: "It has been argued that the introduction of a higher denomination bank note could exert inflationary pressure on the economy…inflation in Nigeria is a monetary phenomenon. Secondly, in some countries such as Singapore, Germany and Japan, the highest denominations are 10,000 SGD, €500 and Yen 10,000 respectively.
These denominations have relatively high dollar equivalent. The levels of inflation are, however, low at 2.8, 1.1 and -0.7 as at 2010."
Sanusi, who said the new currency had been approved and designed, also gave out some features expected in the coming N5,000 note that will celebrate the achievements of women by capturing images of Margaret Ekpo, Funmilayo Ransome-Kuti and Hajia Gambo Sawaba in the front of the currency.
According to him, the image of the National Assembly is captured on the back of the note.
He said, however, that the introduction of the new currency series would be gradual as the bank notes would circulate simultaneously along with the old series until they were completely withdrawn from circulation.
He said: "There would be no urgent need for exchange of the old for the new bank notes by the general public for as long as the old banknotes are in circulation; they will remain legal tender."
Sanusi further explained that the impending review was targeted among other things to incorporate a more effective feature for the visually-challenged; introducing new security features on the redesigned banknotes, and to introduce a new set of coins that would be generally acceptable for transactions.
This Day (Abuja)
