The Central bank of Nigeria reduced the cost of printing banknotes in 2020 by ₦16.905 million, showing a 28.8% decline.
This is a shift from its usual increasing print costs.This was disclosed in the recently released currency report for 2020.
According to the report, the apex bank has concluded upgrade of the Cash Activity Reporting Portal (CARP) for transmission of currency management data from the financial industry to the Nigerian Inter-Bank Settlement System (NIBSS), leading to less paper money usage.
What the CBN is saying
The report partly reads, “The total cost incurred on printing of banknotes in 2020 amounted to N58,618.50 million, compared with N75,523.50 million in 2019, indicating a decrease of ₦16,905.00 million or 28.84 per cent.”
CBN stated in the report that the notes were printed by the Nigerian Security Printing and Minting Plc (NSPM Plc). CBN said, “The NSPM PLC remained the sole printer of the Nigerian legal tender currency. The Central Bank of Nigeria as a major investor holds 89.52 per cent of the shares in the company.
The company has an installed capacity to produce four (4) billion pieces of banknotes per annum. In 2020, a total of 2.52 billion pieces of banknotes were produced, compared with 3.05 billion pieces of banknotes in 2019. This represented a decrease of 529.31 million pieces or 17.37 per cent, on account of lower Bank’s currency order volume for the year.”
Bottomline
The Central Bank’s reduction of printing costs is commendable as it is evidence of the banks’ active implementation of its cashless policy.
This analysis is flawed. Printing fewer notes than the previous year does not equate cost reduction.