The Office of the Auditor-General of the Federation has accused the Central Bank of Nigeria, under former Governor Godwin Emefiele, of recirculating N29.77bn worth of dirty and unfit banknotes, in violation of the bank’s Clean Note Policy.
The allegation is contained in the Auditor-General’s Annual Report on Non-Compliance and Internal Control Weaknesses in MDAs for the year ended December 31, 2022, which revealed that several CBN branches issued currency already categorised as “Counted Audited Dirty”—notes officially certified as unfit for circulation.
According to the report, the condemned notes were released across the Abuja, Lagos, Bauchi, and Jos branches between April and December 2022. The Abuja branch accounted for the majority, issuing N28.615bn between October and December 2022. The Lagos branch released N970m in December, Bauchi issued N30m in April, while the Jos branch released N50m and N100m on May 16 and May 27, respectively.
The audit noted: “Counted Audited Dirty banknotes amounting to N29,765,000,000.00 were re-circulated into the system by the Central Bank of Nigeria.” It added that the move violated the CBN’s Clean Note Policy (2018), which mandates that only authenticated fit notes be issued into circulation.
The audit team attributed the breaches to lapses within the CBN’s internal control systems, warning that the release of unfit notes could damage national reputation and reduce currency durability.
CBN’s defence rejected
The CBN offered different explanations across its branches.
– The Abuja branch blamed COVID-19 disruptions and cash scarcity.
– The Bauchi branch denied issuing unfit notes.
– The Jos branch said the release was due to military cash requests during heightened insecurity.
– The Lagos branch cited increased demand during the Christmas season.
However, the Auditor-General dismissed all explanations as “not satisfactory” and insisted the findings remain valid until corrective steps are taken.
The report recommended that the Governor of the CBN be summoned by the National Assembly’s Public Accounts Committees to justify the breaches. If the explanations fail, sanctions outlined in the Financial Regulations for gross misconduct should be applied.
The findings coincide with the CBN’s controversial naira redesign programme, announced on October 26, 2022, which triggered a nationwide cash crunch, widespread litigation, and a Supreme Court ruling extending the validity of old notes beyond the bank’s deadline.
More irregularities uncovered
The audit also exposed delays in the destruction of condemned notes.
– 997 boxes of N10 notes (N99.7m), declared unfit in November 2021, were still in the vault as of October 2023.
– 695 boxes of N500 notes (N3.475bn), processed between October and November 2022, were yet to be destroyed.
Altogether, N3.57bn worth of unfit notes had accumulated due to slow briquetting and disposal processes.
Auditors warned that the delays created risks of pilferage, financial losses, and inefficiency in currency management. Although the CBN claimed destruction had begun, the audit office rejected the defence.
Broader scrutiny of Emefiele’s tenure
The revelations add to growing scrutiny of Emefiele’s administration at the CBN. While the audit report does not directly indict him, it places responsibility on the bank’s management for violating cash-handling rules and failing to maintain proper internal controls.
Emefiele is currently facing multiple corruption and abuse-of-office charges filed by the Federal Government through the EFCC and the Office of the Attorney-General of the Federation, including a 19-count fraud case in Lagos and a 20-count amended procurement case in Abuja. He is also battling forex-allocation and other corruption charges before courts in both the FCT and the Federal High Court.
Earlier in April 2023, DIP Connects Online News reported that bank workers and customers had complained about the poor quality of old naira notes being reintroduced into circulation as the redesigned notes became scarce. Bank tellers and bulk room staff expressed fears that the dirty notes could pose health risks.
ADEOLA KUNLE
