A NEW federal audit has uncovered a major breach of Nigeria’s currency management protocols, indicting the Central Bank of Nigeria (CBN) for re-circulating N29.77 billion worth of dirty and unfit banknotes in violation of its own Clean Note Policy during the final months of former Governor Godwin Emefiele’s administration.
News Point Nigeria reports that the damning revelations are contained in the Auditor-General of the Federation’s Annual Report on Non-Compliance and Internal Control Weaknesses in MDAs for the year ended December 31, 2022, a document now before the National Assembly.
According to the report, several CBN branches including Abuja, Lagos, Bauchi, and Jos reissued banknotes classified as “Counted Audited Dirty,” a category reserved exclusively for currency that has already been processed, confirmed unfit, and earmarked for destruction.
The audit shows that:
Abuja branch released N28.615bn between October and December 2022
Lagos branch reissued N970m in December 2022
Bauchi branch re-circulated N30m in April 2022
Jos branch reissued N50m on May 16 and N100m on May 27, 2022
The report stated: “Audit observed that Counted Audited Dirty banknotes amounting to N29,765,000,000.00 were re-circulated into the system by the Central Bank of Nigeria.”
This action directly contravenes the Clean Note Policy Version 0.1 (2018), which mandates that only fit, authenticated notes may be issued to the public, while unfit notes must never be released by either the CBN or any commercial bank.
The auditor warned that the breach could damage the country’s reputation, undermine public confidence, and reduce currency durability.
The CBN offered varying justifications across the affected branches: Abuja branch cited COVID-19 operational disruptions, claiming cash scarcity forced the bank to release dirty notes to “meet cash shortfalls.”
Bauchi branch denied ever issuing unfit notes.
Jos branch blamed military cash demands during heightened insecurity.
Lagos branch said December’s increased festive-season cash demand pressured them to release the condemned notes.
But auditors dismissed all explanations as “not satisfactory,” insisting the findings would stand until the CBN implemented proper corrective measures.
The report recommended that the Governor of the Central Bank be summoned by the National Assembly’s Public Accounts Committees to justify the breaches or face sanctions for gross misconduct under the nation’s Financial Regulations.
Dirty notes scandal occurred during controversial naira redesign
Notably, the recycling of dirty banknotes occurred during the CBN’s highly controversial naira redesign, launched on October 26, 2022.
Amid the chaos, banks and customers complained about the poor quality of the old notes reintroduced into circulation, with many fearing the mutilated currencies could spread disease, a concern previously reported by News Point Nigeria.
The audit also flagged the CBN’s failure to destroy condemned notes stored in its vaults.
Among the findings: 997 boxes of N10 notes worth N99.7m, declared unfit since November 2021, were still intact as of October 2023, 695 boxes of N500 notes worth N3.475bn, processed between October and November 2022, remained undisposed and a total of N3.57bn in unfit notes was awaiting briquetting and destruction.
The CBN said briquetting had resumed and destruction was ongoing, but auditors again rejected the explanation and maintained their findings.
Although the audit does not indict Godwin Emefiele personally, it places responsibility squarely on CBN management under his watch, adding to ongoing corruption allegations already facing the former governor.
Emefiele is currently: facing a 19-count fraud case in Lagos and being tried on an amended 20-count procurement charge in Abuja.
Battling several other cases tied to forex allocation, abuse of office, and financial misconduct