Although e-payment is becoming more popular in Africa, banknotes and coins will always be relevant and useful, Central Bank of Nigeria (CBN) Deputy Governor, Tunde Lemo has said.
Speaking yesterday at the Association of African Banknotes and Security Documents Printers (AABSDP) conference in Lagos, he said the cash-less policy of the apex bank is on course. He said banknotes and coins will always be useful in consummating transactions.
Lemo said that the proposed N5, 000 note will reduce cost of banking operations, adding that Africa must embrace change and new technologies in printing of bank notes and minting of coins to keep counterfeiters on check.
“Yes, electronic banking is where to go because of the increase in volume of commercial activities in the last 10 years, but then cash will not go away. While others will be growing, the volume of cash in the system will remain the same. So when they castigate us that we are speaking from both sides of the mouth by talking cash-less and introducing a higher denomination, our response is that we must be more efficient with the use of cash because cash will not go away. So we are attacking efficiency from both ends and the two are not contradictory, rather they are complementary,” he said.
Lemo disclosed said that the restructuring of Nigeria’s currency is based on CBN’s constitutional roles, which allow it to print new notes from time to time.
He said that the apex bank has assisted in ensuring that counterfeit-proof notes are printed and circulated within the country.
According to him, given the apex bank’s record in the market and the things it had done over the past 20 years, there is need for it to be trusted.
He said the apex bank is ensuring that features it puts in the currency are so expensive that it will be difficult for counterfeiting to thrive.
“We believe that the coins are very important. There is no society that operates only on banknotes. People say they can’t carry coins, but the moment they go to other countries, they give them coins and they put them in their pocket. The CBN is charged with the responsibility of issuing and managing the legal tender currency in Nigeria,” he said.
Besides, he said that global best practice demands that countries restructure their currencies every five to eight years to be ahead of counterfeiters.
He said that the existing policy actually is that if one must carry high volume of cash, then he must pay the associated charges with the carriage of high volume of cash. Besides, he said that the charges of electronic banking will continue to go down. He said that banks are now reducing cost of electronic banking as they continue to have more transactions along that path.
“Suppose you need to print maybe N1 million N100 notes, you can actually reduce cost by printing them in N5, 000 and of course the differential is very minimal. That is basically what we are saying. At the high end, the volume of N1000 that we are using today, gives a compelling reason why some of it should be denominated in N5, 000 so as to reduce cost,” he said.
He said the policy will not cause inflation because the apex bank is not increasing volume of money supply. “We are only redistributing the percentages that will be in different denomination, so it will not increase inflation,” he said.
“We want Nigerians to carry less cash. We cannot say we don’t want Nigerians to carry cash because people carry cash all over the world and they will continue to carry cash,” he said.