Where does Nigeria print money? – This is a common question asked by many curious Nigerians as to how the country’s banknotes come to be. There have been speculations in the past that the country printed her banknotes in a foreign country. However, the Central Bank of Nigeria (CBN), has since debunked the news to be false as they don’t or they no longer print Naira notes abroad. Is that true or false? Well, you don’t have to deal with hearsay and speculations any more. In this article, we’ll be discussing where the naira is printed so you get the right facts.
Where is the Naira printed?
First of all, the Central Bank of Nigeria is the only body allowed to produce Naira notes in the country. This is by law and according to Section 2b and Section 17 of the CBN act. The department of the CBN responsible for printing money is the Currency Operations Department. No one, other than money issuing authorities can purchase the money printing machines.
To answer the question, most of the Naira is printed in Nigeria by the Nigeria Security Printing and Minting (NSPM) Plc. You can see this in action if you happen to visit the Mint inspectorate in Abuja or Lagos state. As mentioned, most of the Nigeria Naira is printed in Nigeria. This means that some of the Naira are still printed and still imported from overseas.
You can get this info directly off the CBN official website so you know it is true. According to the website, the Naira is “sometimes printed by other overseas companies”. Nevertheless, it’s important to note that even if overseas companies do print some Naira notes, they all get issued by the Central Bank.
After the Naira is printed and examined by the Mint inspectorate to confirm that they’re of quality, they get issued to Deposit Money Banks (DMBs) in replace for unfit notes. Unfit notes simply refer to very old Naira notes or those that are torn or worn out. This is why you can go to the bank with bad Naira notes and they’ll still be accepted.
The money is exchanged and sorted using the Clean Notes Policy. Note that the unfit notes are disposed of. They are shredded using a paper shredding machine.
Which Naira notes are printed abroad?
Since some Naira notes are printed in the country while others are printed outside, which notes are printed abroad and which are printed in the country? Well, the Central Bank never stated which naira notes are printed where but, there have been different findings over time.
In 2019, Naira Metrics reported that the CBN spends N231.2 billion to print banknotes from 2013 to 2018 – 6 years. Although the cost was said to be derived from expenses by the Nigeria Security Printing and Minting (NSPM) Plc alone, the high cost could suggest some foreign expenses. This was why there were speculations at the time that Nigeria was spending billions to import minted naira notes.
According to a Daily Trust source as revealed in a 2019 article as well, it was stated that the NSPM only printed lower denominations of the Naira which include N5, N10, N20, and N50 notes. As you should know these variants of the Naira are polymer notes which last longer than the paper notes. The Daily Trust source revealed that the higher denominations of the Naira which include N100, N200, N500, N1000 notes were produced out of the country and imported.
While CBN doesn’t state what Naira’s notes are printed domestically or not, this report gives us an idea. The CBN via Mrs. Eleje (The Director of Currency Operations of the CBN) in 2019 said that they no longer import Naira notes and everything is printed within the country. However, in 2021, the CBN official website still states that some naira notes are printed by overseas companies and issued by the apex bank.
Why can’t CBN print more money?
This is another popular question asked by a lot of curious Nigerians. Nigeria has been in and out of recession several times over the years. Why can’t the CBN just print more and more money so the country doesn’t have to be in recession or suffer any financial loss? Well, the reason is a simple one.
Money has value because it’s scarce. Before money is printed, the CBN considers a lot of things most of which have to do with the productivity of the country. If so much money is printed for no reason, it will lead to inflation. What this implies is that with an increase in money available to people, there will be a continuing rise in the general price level.
I’ll break it down. If everyone has so much money in Nigeria, people who offer services and sell goods won’t need to anymore. They now have the money they were looking for in the same place. The few people who would want to continue will place their prices so high since they know everyone now has money.
If such happens, the Nigerian economy will cripple in no time because the Naira will be devalued. Here’s how; A soft drink seller may decide to sell a bottle for N100,000 since they know everyone now had money. That same soft drink could cost about $10 in the United States for example. What that means is that $10 = N100,000 – the Nigerian Naira has never been so devalued in its history.
After reading this article, I believe you now know the answer to the question – where does Nigeria print money. The naira notes are all printed in Nigeria although, in the past, some denominations were imported from other countries. Also, there are reasons why the CBN can’t just print more money which were also discussed in this article.