- In 2022, N29.65 billion was allocated to currency issuance expenses, a significant increase of 94.66% from the N15.23 billion spent in 2021
- Currency issue expenses cover printing, processing, distribution, and disposal of currency notes, recognized as costs when incurred
According to recently released financial statements from the apex bank, the Central Bank of Nigeria and its subsidiary incurred a cost of N74.84 billion to produce and distribute currencies, including new naira notes, throughout 2022.
Despite the naira scarcity that affected the country in the latter months of 2022, the CBN’s expenditure on currency production and distribution increased by 40.42% compared to the previous year, surpassing the N53.29 billion spent in the preceding year.
In 2022, the CBN allocated N29.65 billion towards currency issuance expenses, representing a substantial 94.66% rise from the N15.23 billion spent in 2021.
Defining currency issue expenses, the bank said, “Currency issue expenses relates to expenses incurred in relation to the printing, processing, distribution, and disposal of currency notes. This is recognised at cost when incurred.”
The cost of sale which equates to the expenses incurred by one of the subsidiaries (the Nigerian Security Printing and Minting Plc in this case) in respect of the production of currency notes and coins was N45.19bn in 2022, an 18.72 per cent increase from the N38.07bn it was in 2021.
It added, “They include cost of raw materials, employee benefit expenses relating to production staff, electricity and diesel expenses, depreciation and repairs and maintenance.”
During the year 2022, there was a 9.47% decrease in the total currency in circulation, amounting to N3.01 trillion, compared to the N3.32 trillion that circulated in 2021. The year 2020 witnessed a total expenditure of N58.62 billion on the printing of banknotes, marking a 28.83% reduction from the N75.52 billion reported in 2019, as indicated in the bank’s ‘2020 Currency Report.’
In October of 2022, Godwin Emefiele, the suspended Governor of the Central Bank of Nigeria, made an announcement that the bank intended to introduce redesigned naira notes by December 15, 2022. Additionally, certain denominations of the existing notes would lose their status as legal tender by January 31, 2023.
This decision resulted in a prolonged period of cash scarcity that adversely impacted the economy for several months.
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