CBN Confiscates 67,000 Counterfeit Naira Notes In 2020

Higher banknotes’ share of value of currency in circulation is 98%

A total of 67,265 banknotes with a nominal value of N56.8 million were confiscated last year, the 2020 yearly report of the Central Bank of Nigeria (CBN) has revealed.

The volume is 20.8 per cent less than 84,934 pieces confiscated the previous year and 12.18 per cent short of the nominal value. In 2019, N64.7 million was confiscated.

The report also revealed that N1000 and N500 bills dominated the confiscated denominations, accounting for 69.06 percent and 30.79 per cent respectively.

The two highest denominations accounted for 99.85 per cent of seized fake naira with smaller denominations taking only 0.15 per cent. The data validates the historical trend where criminals target higher denominations for counterfeiting.

According to the statistics, the ratio of confiscated counterfeit notes to the volume of currencies in circulation was 13 pieces per million or one to 77,000, suggesting that one out of every 77,000 banknotes in circulation last year was fake.

The apex bank reports that the volume of currency-in-circulation (CIC) increased by 19 per cent from N2.44 trillion at the end of 2019 to N2.9 trillion by December 31, 2020. The increase suggests the continued dominance of cash transactions despite the growth of digital payment systems.

Detailed analysis showed that N5, N10, N20 and N50 banknotes accounted for 28.4 per cent of the total volume of currency in circulation. The smaller denominations’ share of the value of the money in circulation was only 1.9 per cent while 100, N200, N500 and N1000 accounted for 63.5 per cent and 98.08 per cent of the volume and value of the currency in circulation respectively.

According to the report, the total stock of currency (issuable and non-issuable) in the vaults of the bank at the end of December 2020 was 2.75 billion pieces compared with 2.64 billion pieces reported in 2019. The figures show an increase of over 100 million pieces or four per cent.

“At end of December, 2020, the total issuable notes (newly printed notes and counted audited clean notes) was 592.94 million pieces, compared with 726.43 million pieces in 2019, representing a decrease of 133.49 million pieces or 18.38 per cent,” the report notes.

Last year, the apex bank cut its expenditure on currency printing from N75.5 billion spent in 2019 to N58.6 billion. The Bank had spent the N64 for the same process in 2018.

“The total cost incurred on printing of banknotes in 2020 amounted to N58,618.50 million, compared with N75,523.50 million in 2019, indicating a decrease of N16,905 million or 28 per cent,” the report states.

In a separate press release, the regulator said the reduction was in line with the objective of the Godwin Emefiele-led CBN to cut the cost of printing banknotes and cash management and that eNaira was also initiated in line with the policy.

The report also says the CBN generated the sum of N6.5 billion as total income from currency management activities in the year under review compared with N13.2 billion realised in 2019. The figures imply a decrease of N6.7 billion or 50.9 per cent.

“The income generated was largely from penal charges on unsorted banknotes deposited by DMBs and charges for authentication of foreign currency deposits with the Bank,” says the report.

It also disclosed that the Bank incurred a total of N67.2 billion as expenses on currency operations in the year. The amount is N18 billion or 21 per cent less than N85.2 billion spent a year earlier.

– The Guardian