The printing of lower denominations of naira notes in polymer -N5; N10; N20 and N50- was introduced during the Prof. Chukwuma Soludo’s tenure as CBN governor.
But the apex bank had last month hinted of plans to scrap the polymer notes because they fade easily, despite earlier experiments, which showed that the notes could last longer than paper notes.
Critics of the planned action argued that the policy reversal with its attendant huge capital outlay would constitute a drain on the nation’s economy.
Some of the issues thrown up by the CBN’s change of mind included 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.
However, CBN Deputy Governor, Operations Directorate, Mr. Tunde Lemo, in an interview with THISDAY at the weekend, said the switch-over to paper notes would not cost the apex bank additional money.
He said contrary to the fears being nursed in some quarters, the planned switch over to paper notes “does not have cost implications since we are not destroying the polymer notes in circulation.
“What we have resolved to do is to switch over to paper notes when next we want to print naira notes.”
Lemo explained that the decision to revert to the use of paper notes was in response to public outcry in the wake of the erosion of the quality of some of the polymer notes.
“This is a hot environment and the prospect of the polymer notes lasting longer with all their features intact was not working as we had thought when the use of polymer notes was adopted.
“We later discovered that the environmental impact of the destruction of polymer notes is not good for our environment. We won’t want to do open air burning,” he said.
Lemo said the change was imperative because the polymer notes, though durable, fade out easily, although the research the apex body conducted showed that the polymer could last more than paper notes.
He explained that the substrate (the plastic) lasted longer, but the in-cosubstrate (printing chemical) had a short life and therefore “with the benefit of hindsight, we probably should not have adopted polymer”.
On the modality to be used for the switch-over, the CBN chief explained that when the polymer notes in circulation become tattered and ready to be disposed off, the CBN would start the printing of paper notes.
Lemo also said the apex bank decided to discontinue with the printing of polymer notes because the printing firm– Securency- partly owned by Reserve Bank of Australia, and which was contracted in 2006 to produce the notes, was recently indicted over its activities in many parts of the world.
He said having been blacklisted for allegedly offering bribes in some countries, CBN decided that Securency is not an institution to rely upon.
When confronted with the argument that paper money is susceptible to counterfeiting, the CBN chief said technological advancement had dealt with the issue of counterfeiting, saying “technology has given us the ability to detect counterfeiting.”
According to him, there are three levels of authentication in the management of paper money, adding that their security features are much more robust and stronger than previous ones.
He said rather than heap blames on CBN, the apex bank should be commended for responding to the complaints of members of the public on polymer notes.
The CBN chief was earlier quoted in Washington DC as saying the bank would start to produce the second generation of lower denomination notes in paper and not in polymer.
He spoke on the sidelines of the Spring Meeting of the World Bank and IMF last month.
Lemo said when the CBN was going to introduce the polymer currencies, its investigation showed that they could last longer than ordinary paper notes.
Some critics had wondered why it took CBN a period of six years before it detected the flaws in the polymer notes after the N20 denomination was first introduced in 2007 and later in 2009 the N5, N10, and N50 denominations.