The latest annual audit of the Office of the Auditor-General of the Federation has uncovered fresh breaches in the Central Bank of Nigeria’s currency-management operations under former governor Godwin Emefiele.
The report shows that the apex bank reissued N29.77 billion worth of “Counted Audited Dirty” banknotes in 2022, violating its own Clean Note Policy.
The irregular issuances occurred across CBN branches in Abuja, Lagos, Bauchi, and Jos between April and December 2022.
Abuja alone released N28.615 billion of the condemned notes within just three months—October to December 2022. Lagos issued N970 million in December 2022, Bauchi released N30 million in April, while Jos supplied N50 million and N100 million on May 16 and May 27, respectively.
Auditors said the releases breached the Clean Note Policy (Version 0.1, 2018), which mandates that only authenticated fit notes may re-enter circulation while all unfit notes must be withdrawn and destroyed. They warned that the action weakened internal controls, exposed Nigeria to reputational damage, and shortened the lifespan of circulating notes.
The CBN branches offered different explanations. Abuja attributed the releases to cash scarcity during the COVID-era disruptions. Lagos blamed seasonal demand during Christmas. Jos linked its action to military cash requests in periods of heightened insecurity. Bauchi denied issuing any unfit notes.
Auditors rejected all explanations as “not satisfactory,” insisting the breaches stand until the CBN implements corrective steps. They recommended that the Public Accounts Committees of the National Assembly summon the CBN governor and management to justify the violations and apply sanctions under the Financial Regulations where justification fails.
The audit also disclosed delays in destroying already-condemned notes. It found that 997 boxes of N10 notes valued at N99.7 million, marked unfit since November 2021, were still sitting in the vault as of October 2023. Another 695 boxes of N500 notes valued at N3.475 billion, processed between October and November 2022, were also awaiting destruction.
In total, N3.57 billion worth of condemned notes had accumulated due to delays in briquetting and disposal.
Auditors warned that the backlog created risks of pilferage, loss of public funds and inefficiencies in the bank’s currency-management operations. The CBN said briquetting had commenced, but auditors rejected the explanation and upheld their findings.
The issues surfaced during the rollout of the naira redesign programme, announced on October 26, 2022, which triggered nationwide cash shortages, legal battles, and a Supreme Court ruling extending the validity of old notes.
Although the audit does not directly indict Emefiele, it places responsibility on the CBN leadership of the period for violating note-handling protocols and failing to enforce proper controls.
Meanwhile, the Federal Government is prosecuting Emefiele in multiple cases handled by the EFCC and the Office of the Attorney-General of the Federation, including a 19-count fraud case in Lagos, a 20-count procurement case in Abuja, and several forex-allocation and corruption-related charges before the Federal High Court and the FCT High Court.
The audit office insisted that CBN officials must appear before the National Assembly to defend the breaches and outline corrective actions.