The Central Bank of Nigeria (CBN) is to spend 40.3 billion naira (US$249 million) to produce new coins and naira notes, the local media reported Monday, as criticism trailed the planned introduction of the 5,000 naira note, which is the equivalent of about US$31.
The report quoted an unidentified member of the CBN board as saying that most of the new notes and coins would be printed by the Nigerian Security Printing and Minting Company.
However, he said the 5,000 naira note – which will be the nation’s highest currency denomination – would be printed by a foreign firm with the necessary technology and the capacity to handle the sensitive features on it.
The CBN had last Thursday announced a comprehensive review of the country’s currency and the plan to introduce the 5,000 naira note, as well as to convert the 5, 10 and 20 naira notes to coins.
The new currency regime will come into effect in the first quarter of 2013.
The new coins will join the 50 kobo, 1 naira and 2 naira coins already in existence but which Nigerians hardly use.
Meanwhile, critics of the plan to introduce the 5,000 note have warned that the unintended consequences might outweigh the benefits.
They said the introduction of higher currency notes in an economy often signifies a regime of increased and sustained fiscal deficit financing.