In a financial disclosure recently released by the Central Bank of Nigeria (CBN), it has been revealed that a total of N74.84 billion was expended by the apex bank and its subsidiary in the production and distribution of currencies, including new naira notes, during the year 2022.
Despite the challenges posed by a scarcity of naira in the latter part of 2022, the CBN’s expenses witnessed a substantial increase of 40.42 per cent compared to the previous year’s expenditure of N53.29 billion on currency rollout.
Within the financial statements, it is highlighted that the CBN allocated N29.65 billion towards currency issue expenses in 2022, which marks an impressive surge of 94.66 per cent from the N15.23 billion disbursed in 2021.
The term “currency issue expenses” encompasses costs incurred in relation to printing, processing, distribution, and disposal of currency notes. This expenditure is recognized as cost when it is incurred, according to the bank’s definition.
In the same vein, the subsidiary responsible for the production of currency notes and coins, the Nigerian Security Printing and Minting Plc, incurred expenses amounting to N45.19 billion in 2022. This figure reflects an increase of 18.72 per cent from the previous year’s N38.07 billion.
The expenses cover various elements, such as raw material costs, employee benefits for production staff, electricity and diesel expenditures, as well as depreciation, repairs, and maintenance costs.
Notably, the total currency in circulation during 2022 was recorded at N3.01 trillion, indicating a decline of 9.47 per cent from the N3.32 trillion noted in 2021. Comparatively, in 2020, the expenditure associated with printing bank notes totaled N58.62 billion, signifying a decrease of 28.83 per cent from the N75.52 billion reported in 2019, according to the bank’s ‘2020 Currency Report.’
In a significant development in October 2022, Godwin Emefiele, the suspended Governor of the CBN, made an announcement regarding the release of redesigned naira notes by December 15, 2022. Furthermore, certain denominations of existing notes were set to lose their legal tender status by January 31, 2023.
This decision led to a prolonged cash shortage that persisted for months and had adverse repercussions on the economy.
