CBN DUMPS POLYMER FOR PAPER NOTES IN 2014

The Central Bank of Nigeria has said it will start printing the naira
in paper notes in 2014.
It signed a deal in 2006 with...
Australia's Securency International to
print lower more-circulated units of the naira in polymer, while
higher denominations were kept in paper form.
But six years after and following allegations that the manufacturer
had bribed foreign officials to secure contracts, including in
Nigeria, the CBN said it was being forced to reverse the policy.
A report byAFPon Tuesday quoted the spokesman for the CBN, Mr.
Ugochukwu Okoroafor, as saying, "Polymer has been on a test run since
2007. This explains why we did not go the whole hog by printing all
the notes in polymer.
"We only used polymer for N5, N10, N20 and N50, while N100, N200, N500
and N1,000 are in paper form. We soon discovered that the [polymer]
notes easily fade out because of our peculiar hot climate in Nigeria…
making them look tattered when in use over time."
Earlier experiments indicated that the polymer-based notes, which are
in use in 23 countries around the world, including Australia, could
last longer than traditional cotton-paper notes.
But the CBN said there had been a public outcry about the poorer
quality of some of the new currency in circulation.
Securency International was reported to have supplied 1.9 billion of
its guardian brand polymer-based notes to Nigeria between 2006 and
2008.
In the wake of the bribery claims, the Reserve Bank of Australia sold
its 50 per cent stake in the firm.
Innovia Security, which bought out Securency International earlier
this year, said it did not comment on clients or their business but
added that a number of countries with hot and humid climates used
their product.
"We have had no issues of premature ink wear or colour fading in these
markets," a spokesperson said in an e-mailed statement.
The report said Nigeria, with a predominantly cash-based economy, was
looking to increase people's use of electronic payment methods such as
credit cards, online trading and introducing cash-point machines in a
bid to try to reduce the amount individuals could carry around.
However, there are concerns that switching back to paper notes is a
sign of a lack of a coherent policy.
"My concern is that Nigeria is fond of policy somersaults," said a
former banker, Mr. Moruf Akamo.
He also said, "What becomes of the initial investment in the polymer
technology, considering that the notes have been in circulation for
only six years after their adoption in 2007?"
Akamo said the CBN should have done more research to ascertain the
feasibility of polymer notes before starting the project.
"Why is Nigeria going back and forth? It's time our policy makers got
their acts together and do whhat is right for this country," he said.
A treasury manager at a commercial bank in Lagos, Mr. Yemi Adegbola,
advised the central bank against spending money to print paper notes,
which could degrade quickly with daily handling and the tropical
climate.
"The trend worldwide is to embrace polymer. I wonder why Nigeria's
case is different?" he added, claiming that polymer was less
susceptible to forgery.
"It's not easy to fake polymer notes like paper notes," he said.