Nigeria owns one of West Africa’s most established security-printing companies. Yet foreign contractors handled most of the country’s banknote orders in 2025.
The Central Bank of Nigeria approved the production of 5.71 billion banknotes during the year. This was up 20.5 per cent from 4.74 billion in 2024.
The CBN allocated only two billion notes to the Nigerian Security Printing and Minting Plc. That represented 35 per cent of the total order. Foreign high-security printers received the remaining 65 per cent.
The figures expose a deeper industrial problem. Nigeria has the infrastructure to print currency locally. However, the national mint still cannot meet the required volume and delivery schedule.
Foreign Printers Still Handle Most of the Work
The CBN assigned two billion banknotes to the Nigerian Security Printing and Minting Plc in 2025.
By the end of December, the company had delivered 1.24 billion notes. That represented 62 per cent of its allocation. It still owed the CBN about 760.76 million notes, or 38 per cent of the order.
The delivered volume represented only about 21.7 per cent of the 5.71 billion notes approved for production.
Foreign printers completed 2.206 billion notes in the ₦1,000, ₦500 and ₦200 denominations.
The CBN also awarded another contract for 1.5 billion notes to foreign companies in November 2025. However, the contractors had not completed that order by year-end.
The foreign orders therefore did more than provide emergency support. Overseas companies became central to Nigeria’s currency supply.
That outcome appears inconsistent with the Nigerian Mint’s official role as the country’s domestic currency producer. The company was established in 1963.
It says it provides currency production, document security and other specialised printing services for the CBN and public institutions.
What Is Limiting the Nigerian Mint’s Capacity?
Nigeria’s dependence on foreign printers reflects problems with capacity and execution.
The Nigerian Mint did not complete its smaller allocation before the end of 2025. This happened even though the CBN gave it only 35 per cent of the total production order.
Banknote production requires more than conventional printing machines. It depends on specialised equipment, controlled facilities, technical expertise and imported materials.
It also requires security features and strict quality assurance.
The Mint says it manufactures some printing plates in Nigeria. However, it still imports sophisticated production machines and major raw materials from overseas suppliers.
That dependence means local printing does not automatically eliminate foreign-exchange exposure.
Nigeria may produce the final banknotes domestically. Still, it pays overseas suppliers for equipment, paper, ink and security components.
However, local production can retain more value within the economy than complete outsourcing. It can also develop technical skills and support specialised jobs.
Local production would also give Nigeria greater control over production schedules.
Why Does Nigeria Still Need So Much Cash?
Nigeria’s electronic payment industry continues to expand. However, cash remains central to everyday transactions.
Currency in circulation rose to ₦5.73 trillion in 2025 from ₦5.44 trillion in 2024. This represented an increase of about 5.3 per cent.
The number of banknotes approved for production also rose by 20.5 per cent within one year.
This growth shows that digital payments have not removed Nigeria’s need for physical currency.
Many informal businesses still operate mainly in cash. Rural communities often have limited banking infrastructure.
Unreliable network services can also disrupt card payments, transfers and point-of-sale transactions.
Consumers sometimes keep cash outside banks during periods of financial uncertainty. Others do so when they fear payment-system disruptions.
The CBN considers inflation, economic growth, replacement rates and required buffer stocks when estimating currency demand. It also remains the sole issuer of legal tender under the CBN Act.
Nigeria therefore faces a difficult balance.
It must continue developing digital payments while maintaining enough cash for people and businesses that still depend on it.
That makes domestic banknote capacity relevant, even in a cashless economy.
Who Pays for Nigeria’s Dependence on Foreign Printers?
The CBN’s annual report did not disclose how much Nigeria paid foreign security printers in 2025.
Without that figure, the public cannot calculate the full foreign-exchange cost of outsourcing most banknote production.
The economic concern remains clear.
Nigeria pays overseas contractors in foreign currency. At the same time, businesses, manufacturers and importers also compete for dollars and other currencies.
Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, supports stronger domestic currency production.
He argues that local production would conserve foreign exchange and support employment.
Yusuf also believes Nigeria should expand local security printing beyond banknotes. He identified ballot papers and cheque books as possible areas.
A stronger domestic security-printing industry could create opportunities for engineers, technicians, cybersecurity specialists, designers and manufacturers.
It could also reduce Nigeria’s dependence on external companies for sensitive public documents.
However, localisation must make economic sense.
Producing banknotes locally at a significantly higher cost would not automatically represent good policy. Neither would investing in machines that later remain underused.
Nigeria needs to compare the full cost of domestic production with foreign contracts.
That assessment should include equipment, materials, maintenance, security and delivery performance.
Expert View
Ayodele Akinwunmi, Chief Economist at United Capital Plc, supports greater domestic production.
However, he warns against expanding the Mint without considering Nigeria’s long-term shift towards digital payments.
His position qualifies the argument for complete localisation.
Nigeria may need more local capacity today. But rapid growth in electronic transactions could eventually reduce demand for physical banknotes.
Large investments in new printing infrastructure could become difficult to justify if cash usage declines over the equipment’s lifespan.
Akinwunmi therefore considers controlled foreign printing acceptable when local capacity falls short. However, the CBN must protect the currency’s security.
Nigeria Must Decide What Capacity It Needs
The CBN continues to improve other parts of currency management.
It has strengthened counterfeit detection and expanded automated banknote processing. It has also increased monitoring of how banks handle cash.
The CBN has explored more sustainable ways to dispose of damaged currency. These include recycling destroyed notes into other products.
These measures improve the management of banknotes after production. However, they do not solve the manufacturing gap.
Nigeria must now decide how much domestic printing capacity it will need over the next decade.
The government could modernise the Nigerian Mint and improve its management. It could also gradually raise the company’s share of CBN orders.
Nigeria could support qualified private security printers as well. This would build a wider domestic industry instead of relying entirely on one state-controlled company.
Any expansion should include clear production targets, delivery deadlines and public reporting on costs.
SOURCE: businesselitesafrica.com