An audit by the Office of the Auditor-General of the Federation has uncovered that, under former Central Bank of Nigeria (CBN) Governor Godwin Emefiele, the bank reissued ₦29.77 billion worth of “Counted Audited Dirty” banknotes that previously certified as unfit for circulation between April and December 2022.
The audit, part of the 2022 Annual Report on Non-Compliance and Internal Control Weaknesses, reveals that the CBN’s branches in Abuja, Lagos, Bauchi, and Jos played a role in the controversial reissue of condemned currency.
In Abuja alone, auditors say ₦28.615 billion of the tainted notes were released between October and December 2022. Lagos accounted for ₦970 million in December of that year, while Bauchi and Jos released ₦30 million in April in Bauchi, and ₦50 million and ₦100 million on May 16 and May 27, respectively, in Jos.
This action, the audit states, breached the CBN’s own “Clean Note Policy (Version 0.1, 2018)”, which requires that only authenticated, fit notes be reissued, while unfit notes must be withdrawn and destroyed.
According to the auditors, the re-circulation of these condemned notes represented a fundamental failure of internal controls, exposing Nigeria’s currency management system to serious reputational risk and shortening the useful life of its banknotes.
When challenged, the CBN branches offered a variety of explanations. The Abuja office blamed the decision on cash shortages during the COVID-19 pandemic, while Lagos said it was responding to a seasonal spike in demand during the Christmas period. Jos claimed the releases were tied to military cash needs in times of insecurity, and Bauchi denied issuing any unfit notes. But auditors rejected these reasons, calling them “not satisfactory” and reaffirming that the policy violations remain valid until proper remedial measures are enacted.
Beyond the re-circulated dirty notes, the audit report also identified a backlog in destroying condemned currency. According to the report, as of October 2023, nearly ₦3.57 billion in unfit notes (stored in boxes) had not been properly processed for destruction. Specifically, 997 boxes of N10 notes (₦99.7 million) and 695 boxes of N500 notes (₦3.475 billion) remained in vaults, pending briquetting and disposal. Auditors warned that this backlog creates risks of pilferage, loss of public funds, and critical inefficiencies in the currency-management system.
The revelations come amid strong scrutiny of Emefiele’s term as CBN governor. While the audit does not explicitly indict him personally for this breach, it places serious responsibility on the CBN’s leadership during that period. Emefiele is already facing multiple charges, including fraud and procurement-related accusations, brought by the Economic and Financial Crimes Commission (EFCC) and other federal agencies.
Audit authorities have called for stronger accountability: they recommend that the Public Accounts Committees of the National Assembly summon CBN leadership to explain the violations. They also proposed sanctions under the Financial Regulations if the CBN fails to justify or correct its note-handling procedures.
These findings add a troubling chapter to the broader debate on Nigeria’s controversial naira redesign program, announced in October 2022. That policy, which sought to reconfigure key denominations, already sparked widespread cash shortages, legal disputes, and a Supreme Court decision to extend the validity of old notes.
In sum, the audit paints a picture of the CBN at that time operating in breach of its own currency-quality standards, risking public trust, and failing to enforce basic controls intended to safeguard the integrity of Nigeria’s cash. If the National Assembly follows through on auditors’ recommendations, the central bank may soon face formal oversight and potential sanctions.
