The Deputy Governor, Financial System Stability, Central Bank of Nigeria, Aisha Ahmad, has revealed that the CBN spent N800bn between 2017 and 2021 on the production, storage, transportation and destruction of the currency.
According to The PUNCH, Ahmad, revealed this on Friday during her appearance before the House of Representatives.
Findings by Sunday PUNCH reveal that the apex bank spends approximately N150 billion annually on the management of the naira, an increase of N10 billion as declared by Ahmad in her presentation at the Senate on Friday.
It would be also recalled that a former CBN deputy governor, Dr Kingsley Moghalu, had earlier revealed that the apex bank spends about N150bn annually to maintain the naira.
He explained that the sum was utilized annually to make, store, transport, secure, and destroy naira notes.
Based on Ahmad’s disclosure of a N10bn increase, the central bank has spent N800bn on currency production, storage, transportation, and destruction between 2017 and 2021.
According to Section 2(b) of the CBN Act, 2007, Ahmad stated in her presentation that currency management was a key responsibility of the apex bank. She also noted that a functioning central bank was indicated by the currency’s integrity and an efficient supply of banknotes, particularly in countries with a high reliance on cash like Nigeria.
The deputy governor emphasized the multiple problems with currency management that had prevented the CBN from effectively carrying out its responsibility to issue legal tender.
She stated, “The challenges have continued to grow in scale, with the attendant consequences on the bank’s policy effectiveness, if left unaddressed. These challenges include wholesale hoarding of naira banknotes by members of the public.
“An observation supported by statistics shows that cash outside banks consists of over 80 per cent of the currency in circulation; worsening shortage of fit banknotes in circulation. This portends negative public perception of the bank and increasing threat to financial system stability.
“High and increasing cost borne by the bank: A review of the cost of currency management from 2017 to 2021 indicated an average increase of over N10bn per annum and over 90 per cent of currency management costs are attributed to banknote production. This affects the CBN and other participants in Nigeria’s currency management sector (banknote production, storage processing, distribution activities and banknote destruction).” She said.