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CBN Spends N58.6Bn to Print 2.5Bn Naira Notes

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Central Bank of Nigeria (CBN) spent the sum of N58.618 billion to print 2.518 billion Naira notes, valued at  1. 063 trillion in 2020, according a report in the Vanguard.

CBN Spends N58.6Bn to Print 2.5Bn Naira Notes

This was contained in the bank’s 2020 Currency Report posted on its website.

It indicated a decrease in the bank’s expenditure on currency printing, which stood at N75. 523 billion, in 2019 and N64. 040 billion, in 2018.

According to Vanguard, the  current management of the CBN under the leadership of Mr. Godwin Emefiele, has been driving the cashless policy with a view to cutting the cost of printing bank notes and cash management, in the country.  The new e-Naira was also initiated in line with the policy.

According to the report, “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 ₦16,905.00 million or 28.84 per cent.”

CBN indicated in the report that the notes were printed in-country by the Nigerian Security Printing and Minting Plc (NSPM Plc).

The report indicated that CBN, “approved an indent of 2,518.68 million pieces of banknotes of various denominations in 2020 to satisfy the currency needs of the economy, compared with 3,830.94 million in the preceding year.

“The NSPM Plc was awarded the contract for the production of the entire indent. At end-December 2020, NSPM Plc had delivered 100 per cent of the approved indent.”

It put the total stock of currency (issuable & non-issuable) in the vaults of the bank at end December, 2020 at 2.747 billion pieces, compared with 2.641 billion pieces in 2019, indicating an increase of 105.73 million pieces or 4.00 per cent.

“At end-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 showed.

Forex

The report also indicated that a total of $1.830 billion was procured over the course of 2020.

According to the report, “This value represents a decrease of USD2,120.00 million or 53.67 per cent relative to the USD3,950.00 million procured in 2019.

“This was used to fund Bureaux De Change (BDC) operations, payment of estacode and Personal Travel Allowances (PTA) to Ministries, Departments and Agencies (MDAs).”

CBN said that the receipt and authentication of foreign currency deposits by Deposit Money Banks (DMBs) reduced significantly due to the downturn in global trade in 2020.

Currency in circulation

The report indicated, however, that Currency-in-Circulation (CIC) increased by 19.06 per cent from N2.441 trillion at end December, 2019 to N2 .907 trillion at end-December 2020.

“The growth in CIC reflected the continued dominance of cash in the economy. Analysis of the CIC shows that a greater proportion was in higher denomination banknotes (N100, N200, N500 and N1000).

“The higher denomination banknotes together accounted for 63.47 per cent and 98.08 per cent of the total CIC, in terms of volume and value, respectively. The volume of lower denomination banknotes (N5, N10, N20, N50), accounted for 28.43 per cent of the total CIC and 1.92 per cent, in terms of value as at end-December 2020.”

Currency processed

In 2020, a total of 173,585 boxes of banknotes valued at N980. 758 billion was processed, compared with 260,651 boxes of banknotes valued at N1. 533 trillion in 2019.

This represents a decrease of 33.40 per cent in the number of boxes or N552. 971 billion in value of processed banknotes.

Counterfeit Notes decrease

On counterfeit notes, the report showed that a total of 67,265 pieces of counterfeit notes with a nominal value of N56.83 million was confiscated in 2020, indicating a 20.80 per cent decrease in volume and 12.18 per cent decrease in value, compared with 84,934 pieces valued at N64.71 million in 2019.

It said, “The Global standard for the number of counterfeit per million is 100. The ratio of counterfeit notes to volume of banknotes in circulation was 13 pieces per million in 2020, compared to 20 pieces per million banknotes in 2019.

The N1000 and N500 denominations constituted the most counterfeited, accounting for 69.06 percent and 30.79 per cent, of the total counterfeit notes in 2020, respectively.


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E-Financial

CBN Licenses Unified Payments as Second Provider for PTSA Services for Nigeria

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Central Bank of Nigeria (CBN) has awarded the country’s second Payment Terminal Service Aggregator (PTSA) license to Unified Payments, Nigeria’s premier financial technology company, following a rigorous and transparent process,

CBN Licenses Unified Payments as Second Provider for PTSA Services for Nigeria

The move is targeted at enforcing existing requirement that all transactions from point-of-sale channels in Nigeria must go through a licensed Payment Terminal Service Aggregator (PTSA).

The CBN is enforcing the laws to clamp down on financial crimes and other market misconducts and it aligns with the CBN’s objectives to fully track all electronic transactions in Nigeria, given the propensity of using such transactions to fund insecurity, violent crimes, banditry, kidnapping as well as other vices.

According to one analyst, “By awarding a second PTSA license, the apex bank has proactively responded to industry operators who had expressed serious concerns about channelling all transactions through a single aggregator, the Nigeria Interbank Settlement System PLC (NIBBS), as has been the case for some years.

“With the new policy direction, payments service providers would henceforth route all transactions through either of the two licensed Companies.”

Other financial analysts and industry players have commended the Central Bank, affirming that “the move can be a massive step in the right direction. They also commended the open, transparent, and inclusive manner via which the selection process was managed, and the license awarded.

“The selection process, which lasted for months, began with an invitation for qualified organisations within the payment industry to submit an Expression of Interest document, alongside other requisite documentation and additional capital requirement of N1 billion.”

 

The new management of CBN decided not to give the license out without going through an open process – and for the first time in licensing a payment service provider – the apex bank went through a public bid process outlined in its publication of Friday, January 5, 2024, in different national newspapers. At the end of the process, Unified Payments emerged as the most preferred service provider.

Unified Payment Services Limited, also called Unified Payments or UP, is a shared service provider within Nigeria’s financial technology sector owned by a consortium of Nigerian banks. For over 26 years, the firm has provided payment technology to banks and other industry operators. The first and only non-bank entity that is a principal member and licensed acquirer of all of American Express, Mastercard, Visa, UnionPay and Payattitude. Unified Payments facilitates both local and international transactions.

Formerly known as ValuCard Nigeria Plc, Unified Payments led the way to introduce POS payments in Nigeria under its card scheme known as ValuCard which is the first payment card to be issued in Nigeria. The company later transformed into a scheme-neutral and option-neutral service provider enabling transactions under different schemes.

The company has continued to provide leading payment technologies and services, enabling different operators to leverage its capabilities and licenses, enabling prompt and seamless transactions.

Among the shareholders of Unified Payments are First Bank, Access Bank, United Bank for Africa (UBA), Guaranty Trust Bank Plc, Zenith Bank and Fidelity Bank. Other shareholders are Citibank Nigeria Limited, Ecobank of Nigeria Plc, First City Monument Bank Plc, Keystone Bank Ltd, Polaris Bank Ltd, Stanbic IBTC Bank Plc, Sterling Bank Plc and Wema Bank Plc.


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CIBN says Recapitalization will Empower Banks to Lend more to Economy

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Chartered Institute of Bankers of Nigeria, CIBN, has expressed support for the ongoing banking recapitalization exercise saying it will empower banks to lend more to the economy.

CIBN President, Dr. Ken Opara stated this yesterday while speaking at the annual lecture of the institute in Lagos, with the theme “Improving Availability of Credit in the Nigerian Real Economy: The Critical Importance of Liquidity.”

Okpara noted that the volume of credit to the real sector activities namely agriculture, manufacturing and services is low compared to their critical role in driving economic growth.

Consequently, he called for more credit to the real sector, saying, “I   propose that we consider offering more credit to these key sectors and particularly the agriculture sector. It is for this reason that the Recapitalization exercise is a welcome development.

“The recently announced upward review of the Minimum Capital Requirements of Nigeria by the Central Bank of Nigeria would further empower banks to extend more credit to the economy’s productive sectors.”

To address these factors impeding credit to the real sector, Okpara suggested that, “The government needs to improve further the ease of doing business and infrastructural development, such as power, roads, rail networks, etc.

“Setting up industrial centres where these companies can co-habit and share common infrastructure. Harmonize and reduce the various taxes and levies, including locating them in a single hub.

“Banks need to be deliberate in de-risking these companies via Capacity building programmes, and Advisory services.

Specialised Financial Institutions can be created in addition to the Bank of Industry (BOI), especially credit guarantee agencies and risk-sharing institutions, to further facilitate the deepening of credit as practiced in countries such as China which significantly transformed its economy.


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New Report Reveals 20% of Nigerians Use Bitcoin to Transact Daily

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A new report claims that 20 per cent of Nigerians are using Bitcoin to carry out financial transactions every day.

According to the open-source blockchain website, Elastos, the research was compiled from online interviews conducted with 1,407 self-defined ‘tech savvy’ respondents in Brazil, Germany, Nigeria, South Korea, UAE, the UK, and the US.

The interviews were completed by a third party, a registered market research company and completed between 30 March and 04 April ’24.

The report further revealed that 67 per cent of Nigerians would have more trust in Bitcoin to put their life savings than banks and local governments.

The report reads; “The inaugural BIT Index (Bitcoin; Innovation & Trust) – compiled from over 1,400 self-defined ‘tech savvy’ respondents from 7 countries across the globe – sheds light on the actual perception and use of Bitcoin in people’s daily lives, irrespective of its current valuation. Elastos’ BIT Index is part of ongoing research to better track the ‘real world’ use of Bitcoin together with users’ motivations, expectations and barriers around the same.

“In particular, the data reveals the role being played by emerging markets in terms of understanding, usage and confidence around Bitcoin. Nigerian respondents’ levels of usage and trust compare starkly with those expressed from so-called ‘established’ markets such as Germany and the UK and Germany where daily usage levels are just 8% (for German respondents) and (9% for their UK counterparts).

“In terms of the trust – in addition to Nigeria – significant proportions of respondents from Brazil (35 per cent) and the UAE (32 per cent) would have more confidence in Bitcoin-based services to protect their life savings compared to those from markets such as the UK (20 per cent) and Germany (22 per cent).

“When it comes to ensuring the integrity of online transactions, emerging market respondents also revealed their relative confidence in Bitcoin, compared to alternatives. According to the data, 66 per cent of Nigerian respondents and 35 per cent from Brazil have more confidence in Bitcoin-based systems than alternatives such as banks, or national Governments, compared to figures of just 16 per cent (Germany) and 21 per cent (UK) who feel the same.


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