Naira Neglected, Costs Skyrocket — CBN Warns of N315bn Hit

Naira Neglected, Costs Skyrocket — CBN Warns of N315bn Hit From Note Abuse

CBN warns naira abuse drove currency costs to N315.18bn in 2024. Sensitisation and digital payments urged to halt the fiscal bleed.

Atlantic Post

September 25, 2025

4–6 minutes

Banknote Printing, Cash Hoarding, CBN, Currency Management, Economic Policy, eNaira, Financial Investigations, Fiscal Accountability, Naira Crisis, Payments Policy

The Central Bank of Nigeria has issued a blunt rebuke to a nation that treats its currency like confetti. At a national sensitisation launch in Abuja the bank warned that careless handling, mutilation and festive spraying of naira notes are no longer a mere affront to national pride. They are a balance-sheet problem that exploded into a fiscal wound last year when currency management costs surged to N315.18 billion in 2024, up more than 300 per cent from N77.67 billion in 2023.

This is not semantics. Currency issue expenses cover printing, processing, distribution and the destruction of damaged notes. The CBN says the immediate cause is the proliferation of unfit notes requiring replacement and redistribution. That explanation is echoed by economists and commentators who link the spike to the prolonged cash disruptions that followed the naira redesign and the chaotic cash cycle that persisted into 2024. The cost of constant reprinting and logistics is now a visible, measurable drain on public resources.

At the Abuja event the Deputy Governor, Operations Directorate, Dr Bala Bello, warned that the naira is more than a means of payment. It is a national emblem. He singled out everyday offences against that symbol — folding, tearing, writing on notes, spraying at social events and outright mutilation — as behaviours that accelerate the destruction of notes and force the bank to replace them sooner than necessary. Bello called for an alliance of banks, market operators, transport unions, schools, religious organisations and the media to change behaviour and halt the fiscal haemorrhage. Public reporting of the launch and the campaign theme “Naira Our Pride: Handle with Care” underlined the CBN’s intent to make this an all-of-society drive.

The warning about cash hoarding is equally pointed. As the festive season approaches the CBN cautioned that private stockpiling of currency distorts circulation, restricts access to cash for ordinary transactions and compounds logistical costs. The bank urged promotion of alternative payment channels to ease demand for physical notes, a plea that dovetails with its Payments System Vision and earlier pushes for wider adoption of the eNaira and electronic payment rails. The policy logic is simple. Fewer dirty or mutilated notes in the system reduces replacement frequency and extends the life span of the currency.

A blunt audit of the legal and institutional backdrop shows the CBN is within its remit. The CBN Act 2007 gives the apex bank the sole right to issue currency and obliges it to ensure the availability of legal tender. The Act also criminalises tampering with notes. In other words there is both a statutory and an operational case for the Bank to insist on protection of the naira. Whether the state will back that insistence with meaningful enforcement remains an open question.

This is where the story shifts from admonition to accountability. If currency management is now a line item absorbing hundreds of billions, the public has a right to see a transparent breakdown of how those funds were spent. How much was printing, how much logistics, how much on importation of security paper or polymer substrates, how much on destruction facilities and how much on redistribution across the federation. The CBN’s published accounts show the headline numbers. What is missing from public debate is a forensic audit that links those sums to procurement practices, contract awards, and the performance of distribution networks. Independent oversight is overdue.

There is also a simple technical remedy that modern central banks have used to blunt replacement costs — durable substrates and improved currency design. Polymer notes last substantially longer than paper, reducing lifecycle costs despite a higher unit price. Central banks from Australia to Canada have documented the trade-offs. Adopting more durable notes, combined with a relentless public campaign and stricter enforcement of anti-mutilation laws, would pay for itself over time.

But the longer term answer is structural. Nigeria’s leap into digital payment infrastructure, the eNaira experiment and the CBN’s Payments System Vision 2025 are not cosmetic projects. They are strategic instruments to reduce dependence on cash, shrink the physical cash cycle and insulate the economy from the direct costs of note issuance. For this to work the Bank must incentivise merchants, expand agent banking, make digital rails cheaper and more reliable, and carry out a concentrated effort to normalise non-cash settlement for wages, market transactions and transport fares.

The CBN’s campaign is a step in the right direction. But campaigns do not change entrenched behaviour without rules, rewards and consequences. Banks must strengthen their note-sorting protocols and refuse to dispense unfit notes. Market associations and unions must police celebratory spraying and public mutilation. Lawmakers should consider fast-tracking oversight and a targeted audit of the 2024 currency bill. And civil society and the media must refuse to normalise ritualistic currency abuse as part of our social theatre.

This is, in truth, a test of national discipline as much as it is one of institutional competence. The naira is a public asset. Allowing it to be degraded for the sake of social spectacle or convenience is a luxury the public purse can no longer afford. The CBN has sounded the alarm. The question now is whether the country will treat the naira with the care its balance sheet demands.