In one year, the value of currency in circulation increased to N2.9 trillion

According to a recent report by the Central Bank of Nigeria’s (CBN) currency operations department, currency-in-circulation (CIC) increased by 19.06 percent from N2,441.67 trillion at the end of December 2019 to N2,907.13 trillion at the end of December 2020.

The increase in CIC reflected the economy’s continued reliance on cash. According to the CIC, a greater proportion was in higher denomination banknotes (N100, N200, N500 and N1000).

In terms of volume and value, higher denomination banknotes accounted for 63.47 percent and 98.08 percent of total CIC, respectively.

As of the end of December 2020, the volume of lower denomination banknotes (N5, N10, N20, N50) accounted for 28.43% of total CIC and 1.92% in terms of value.

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According to the annual report, a total of 173,585 boxes of banknotes valued at N980,758.00 million were processed in 2020, compared to 260,651 boxes of banknotes valued at N1,533,729 million in 2019. This represents a 33.40 percent decrease in the number of boxes or a N552,971 million decrease in the value of processed banknotes.

Separately, the bank stated that due to the downturn in global trade in 2020, the receipt and authentication of foreign currency deposits by Deposit Money Banks (DMBs) will be significantly reduced.

In addition, the bank saw a significant decrease in the volume and cost of foreign exchange procurement. Over the course of 2020, a total of $1,830 billion was obtained.
This figure represents a decrease of $2,120 billion, or 53.67 percent, from the $3,950 billion obtained in 2019.

According to the report, this was used to fund Bureaux De Change (BDC) operations, payment of estacode, and Personal Travel Allowances (PTA) to Ministries, Departments, and Agencies (MDAs).

The apex bank stated in the report signed by the director in charge of currency operations departs, Ahmed Umar, that despite the limitations caused by the outbreak of the COVID-19 pandemic and its impact in 2020, it still completed the upgrade of the Cash Activity Reporting Portal (CARP) for transmission of currency management data from the financial industry to the Nigeria Inter-Bank Settlement System (NIBSS).

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Aside from that, the CBN boasted that it had completed the development of the Mint tracking system application, needs assessment on the infrastructure, user sensitization, test run at 5 branches, and end-to-end system tests in preparation for the pilot launch in 2021; begun the establishment of the Currency Lab for Banknote quality assessment, authentication, and independent investigations, as well as adjudicating cases of suspected counterfeit banknotes; and registered an IP.

Mr Umar stated that the central bank carried out the framework for CBN direct intervention for the disbursement of lower denomination banknotes to approved beneficiaries via their bankers in order to improve availability and accessibility.