Appeared before Nigerian MP Aisha Ahmad
Naira Maintenance Costs Rising
According to Aisha Ahmad, Deputy Governor of the Central Bank of Nigeria (CBN), between top banks have spent around $1.8 billion (800 billion naira) equivalent on local currency management. New banknote production alone accounts for more than 90% of this figure.
In a recent appearance before Nigerian parliamentarians, Ahmad said the cost of maintaining the local currency was more than $22 million annually, according to remarks released by the Punch. claimed to be increasing. Prior to Ahmad’s disclosure, former CBN Deputy Governor Kingsley Mogal also told lawmakers that the central bank was using about $336 million to manage the currency.
In addition to the high costs associated with managing the Naira currency, the CBN will have to contend with increased risks of counterfeiting, the report said.
Ahmad, meanwhile, in her testimony partly blamed the large-scale naira hoarding by the Nigerian public and the steep rise in costs she characterized. According to observations made outside banks, cash outside banks accounts for more than 80% of the currency in circulation, and there is an increasing shortage of paper money in circulation. It portends and increases the threat to the stability of the financial system,” Ahmad was quoted as saying.
To help the central bank overcome some of the challenges identified by Ahmad, CBN introduced a newly designed naira note into circulation on her December 15th.
CBN does not target politicians
The central bank also limits the amount of cash that individuals and business organizations can withdraw. commentators accuse CBN of using the so-called Naira redesign policy to target politicians. In response to those allegations, Ahmad reportedly told lawmakers the bank’s decision to limit cash withdrawals was based on an investigation.
“We need to be clear that CBN is an independent body and that our decisions are based on research. It’s the work of many teams,” Ahmad was quoted as saying.
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