The Central Bank of Nigeria (CBN) has said less than one percent of the naira – its currency – currently in circulation was fake.
This is in response to a claim by a former deputy CBN chief who said 20% of the currency used by Africa’s most populous nation was fake and that was adversely affecting the economy.
‘‘Twenty percent of currency circulating in Nigeria is fake, you can’t bring down food prices if you have fake currency circulating,’‘ Obadia Mailafia said whiles addressing a public hearing on the 2017 budget on Monday.
But the CBN statement released today (February 15, 2017) disputed the claims stating that for every one million bank notes, there were only 14 counterfeit pieces.
‘‘While we acknowledge that no currency in the world is immune from counterfeiting, we make bold to state that the rate of counterfeiting in Nigeria has been very minimal due to appropriate policies put in place by the bank.
‘‘Indeed our own records at the bank clearly indicates that the prevalence of counterfeit notes in Nigeria from January to December 2016 was LESS THAN ONE PER CENT (0.0014 per cent) or 14 counterfeit pieces out of one million notes,’‘ the statement said.
The CBN also touted security features that made counterfeiting the currency an uphill task. They also said citizens are educated across the country on how to detect fake notes. They asked the former CBN chief to produce empirical evidence to his claim given that his position served to erode the confidence in the naira and sabotage efforts aimed at securing the country’s financial system.
Nigeria, one of Africa’s largest economies, officially entered a state of economic recession for the first time in over 20 years. This came after figures revealed that the economy contracted for a second consecutive quarter of 2016.
According to the Nigeria Bureau of Statistics, the country’s Gross Domestic Product (GDP) contracted by 2.06% in the second quarter of 2016 while the GDP shrunk by 0.36%.
A recession is a period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.
The cause of the slump is believed largely to be as a result of the slump in oil prices on the world market. That situation was worsened by the insurgency in the Niger Delta region, the attacks on oil installations continue to disrupt production of oil in the region. Nigeria has meanwhile fallen behind Angola as the continent’s top oil producer.