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Naira Shortage Hits Banks

By Modupe Gbadeyanka

Business Post has learnt that banks in Nigeria are having problems resulting from scarcity of small Naira denominations.

This, we gathered, is as a result of an embargo placed of the printing of small Naira denominations by the Central Bank of Nigeria (CBN) for about a year now.

Quoting sources at the apex bank, the News Agency of Nigeria (NAN) said the suspension was caused by Nigeria’s prevailing economic recession.

Normally, the CBN prints the N5, N10, N20 and N50 notes abroad and awards contract for this, but it has not done this lately.

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Another reason for the embargo, it was gathered, is due to the high cost of printing these banknotes.

However, it was gathered that the recently printed notes in circulation, including N200, N500 and N1,000, were made by the Nigeria Security Printing and Minting (NSPM) Plc.

“The cost of printing N50 is almost the same as N1,000 but printing small denominations costs more than the value and with the present economic situation, it makes sense to print higher notes, which can be done locally by NSPM,” NAN quoted the source as saying.

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But the CBN, through its Acting Director, Corporate Communications, Mr Isaac Okorafor, has dismissed reports of scarcity of smaller denominations in the market.

He said, “You see, people are fond of abusing these denominations by spraying them to be stepped on during weddings and other ceremonies. The abuse is even worse during the festive season, so we decided to make scarce the denominations. But it’s not that we have not been printing them. Yes, we haven’t printed abroad but we also print locally, which we have been doing.”

However, an employee at the First Bank Plc said that there were hardly smaller currency notes to give to customers throughout the 2016 festive seasons.

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“We usually request for cash from the CBN through our Cash Management Centre, but recently, we have not been able to get mints of N100 and below. We had N50 at one point but it wasn’t in the quantity we are used to getting.

“We have been telling our customers who call to request for mints that the smallest note they can get is N200,” the bank staff, who pleaded anonymity said.

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Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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