POLYMER notes – the glossy currency notes launched on September 30, 2009 by the late President Umaru Musa Yar’Adua to mark Nigeria’s 49th Independence anniversary – are to be withdrawn from circulation.
The notes were introduced by the Central Bank of Nigeria (CBN) when Prof Charles Chukwuma Soludo was the governor. They replaced paper notes.
But Deputy CBN Governor Tunde Lemo has hinted of a plan to stop the printing of small denominations of the naira in polymer notes because they fade quickly.
Lemo spoke yesterday in Washington DC, the United States (U.S.) on the sideline of the ongoing Spring Meeting of the World Bank and the IMF.
A note-printing firm – Securency, partly owned by Reserve Bank of Australia, was contracted in 2006 to produce the polymer notes.
It cost the Federal Government some N750 million.
But, going by what the CBN Deputy Governor said, the production of the paper notes will begin in two months.
Lemo said: “By the middle of the year, we will start to produce the second generation of lower denomination notes, now in paper, not in polymer.
“My plea is that Nigerians should exercise patience with us; it wasn’t the fault of the CBN. It was just because we had to go back to the drawing board to rethink `Project Cure’ in the light of the wish of the public that we should not go ahead with the N5000 notes and lower denomination.
“We will correct that in the course of the year. Polymer certainly will be phased out. In fact, we are phasing out polymer. No new note is being printed in polymer now.’’
Lemo recalled that when the CBN was going to introduce the polymer currencies, its search showed that they could last longer than ordinary paper notes.
His words: “However, with the benefit of hindsight, we probably should not have dumped polymer because, yes, the substrate lasts longer, but the in-consubstrate began to fade; we didn’t realise that at the time of introduction.
“So, part of `Project Cure’ was actually to move away from polymer substrate to paper. Unfortunately, we had a push-back because of the issues around N5000 note and coins.
“The entire programme was put in abeyance. Otherwise, by now, we should have stopped producing polymer.’’
The banker said that the CBN had awarded a contract for the printing of the higher denomination notes to a foreign company because of low capacity at the Nigerian Printing and Minting Company (NPMC).
The CBN will begin to receive the fresh notes from June.
On the campaign on the careful handling of the naira, Lemo said that it was unfortunate that it was not successful, but noted that it is a criminal act to abuse the naira – going by the CBN Act.
He said: “Unfortunately, CBN is not a law enforcement institution; we left that in the hands of the law enforcement institutions and that has not kicked in.
“I still go to parties and see people spraying money; stepping on money; I see touts distributing mint-fresh money that should go to customers.’’
According to Lemo, the CBN has urged the police to step up its surveillance to reduce the abuse of the naira. The bank lacks the power to arrest people who hoard the naira to resell at motor parks and on the streets, Lemo said.