The latest annual audit of the Office of the Auditor-General of the Federation has revealed new violations in the Central Bank of Nigeria’s currency-management operations during former governor Godwin Emefiele’s tenure.
According to the report, the apex bank reissued N29.77 billion in “Counted Audited Dirty” banknotes in 2022, contravening its own Clean Note Policy.
The irregularities were recorded across CBN branches in Abuja, Lagos, Bauchi, and Jos between April and December 2022.
Abuja alone reissued N28.615 billion of the condemned notes within just three months, from October to December 2022. Lagos released N970 million in December, Bauchi issued N30 million in April, and Jos distributed N50 million and N100 million on May 16 and May 27, respectively.
Auditors noted that these releases violated the Clean Note Policy (Version 0.1, 2018), which requires that only authenticated, fit notes re-enter circulation, while all unfit notes must be withdrawn and destroyed. They warned that the breaches weakened internal controls, exposed Nigeria to reputational risk, and reduced the lifespan of circulating currency.
The CBN branches offered varying explanations for the releases. Abuja cited cash shortages during COVID-era disruptions, Lagos pointed to seasonal demand during the Christmas period, and Jos linked its actions to military cash requests amid heightened insecurity. Bauchi, however, denied issuing any unfit notes.
Auditors dismissed all explanations as “not satisfactory,” maintaining that the breaches remain unresolved until the CBN implements corrective measures. They recommended that the Public Accounts Committees of the National Assembly summon the CBN governor and management to account for the violations and impose sanctions under the Financial Regulations if adequate justification is not provided.
The audit further revealed delays in destroying condemned currency. It found that 997 boxes of N10 notes, valued at N99.7 million and deemed unfit since November 2021, remained in the vault as of October 2023.
Additionally, 695 boxes of N500 notes, valued at N3.475 billion and processed between October and November 2022, were still awaiting destruction.
In total, N3.57 billion worth of condemned notes had piled up due to delays in briquetting and disposal.
Auditors warned that the backlog posed risks of pilferage, loss of public funds, and inefficiencies in the bank’s currency-management operations. The CBN said briquetting had begun, but auditors dismissed the explanation and upheld their findings.
The issues emerged during the rollout of the naira redesign programme, announced on October 26, 2022, which sparked nationwide cash shortages, legal disputes, and a Supreme Court ruling extending the validity of old notes.
While the audit does not directly implicate former governor Godwin Emefiele, it holds the CBN leadership at the time responsible for violating note-handling protocols and failing to enforce proper controls.
