CBN Replies Finance Minister, Says Due Process Followed In Naira Redesigning Project

…Says Timing Of Policy Not Wrong

In an apparent response to claims by the Minister of Finance, Budget and National Planning, Zainab Ahmad, that her ministry was not carried along by the Central Bank of Nigeria (CBN), in the ongoing process of redesigning three series of the Naira, the Bank insists it followed the law and due process to carry out the exercise, which is 12 years due.

Speaking with a group of newsmen in Abuja, on Friday night, the spokesman of the CBN, Mr. Osita Nwanisobi, expressed surprise at the minister’s claim, stressing that the CBN remains a very thorough institution that follows due process in its policy actions.

According to Nwanisobi, the Management of the CBN, in line with provisions of section 2(b), section 18(a), and section 19(a)(b) of the CBN Act 2007, had duly sought and obtained the approval of President Muhammadu Buhari in writing to redesign, produce, release and circulate new series of N200, N500, and N1,000 banknotes.

However, urging Nigerians to support the currency redesign project, he said it was in the overall interest of Nigerians, reiterating that some persons were hoarding significant sums of banknotes outside the vaults of commercial banks.

This trend, he said, should not be encouraged by anyone who means well for the country.

Furthermore, he noted that currency management in the country had faced several escalating challenges which threatened the integrity of the currency, the CBN, and the country.

He added that every top-rate Central Bank was committed to safeguarding the integrity of the local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy.

On the timing of the redesign project, Nwanisobi explained that the CBN had even tarried for too long considering that it had to wait 20 years to carry out a redesign.

According to him, the standard practice globally was for central banks to redesign, produce and circulate new local legal tender every five to eight years.

While assuring Nigerians that the currency redesign exercise was purely a central banking exercise and not targeted at any group, the CBN spokesman expressed optimism that the effort will, among other goals, deepen Nigeria’s push to entrench a cashless economy in the face of increased minting of the eNaira.

This, he said, is in addition to helping to curb the incidents of terrorism and kidnapping due to access of persons to the large volume of money outside the banking system used as a source of funds for ransom payments.

Nwanisobi urged Nigerians, irrespective of their status, to support the Naira redesign project, as it is for the greater good of the economy.

The Finance Minister had faulted the naira redesigning project of the Central Bank of Nigeria warning that the timing for the implementation of the policy was wrong.

Ahmed who said that she had no knowledge of the policy until it was announced two days ago by the CBN Governor, Mr Godwin Emefiele said that it would have a negative impact on the foreign exchange market.

The Minister, who commented on the policy in response to question raised by Senator Opeyemi Bamidele ( APC Ekiti Central) during 2023 budget defence session she had with the Senate Committee on Finance, warned CBN of consequences that may arise from it.

Senator Bamidele had in his question, told the Finance Minister that barely two days after announcement of the policy by CBN, repercussion of it on the value of Naira to US dollar was being felt.

“Just two days after announcement of the policy, value of Naira to a US dollar has risen from N740 to N788 to a US dollar due to rush in exchange of stashed Naira Notes for foreign currencies, particularly dollar.

“To me, the policy may be a well conceived one, but the timing going by realities on ground, is very wrong as the Naira may fall to as low as N1,000 to a US dollar before January 31, 2023 fixed for full implementation of the policy,” she said.

Surprisingly, the Minister in her response said she and her Minister of State were not aware of the policy but only heard of it from the media.

“Distinguished Senators, we were not consulted at the Ministry of Finance by CBN on the planned Naira redesigning and cannot comment on it as regards merits or otherwise.

“However as a Nigerian privileged to be at the top of Nigeria’s fiscal management , the policy as rolled out at this time, portends serious consequences on value of Naira to other foreign currencies.

“I will, however, appeal to this committee to invite the CBN governor for required explanations as regards merits of the planned policy and rightness or otherwise of its implementation now,” she said.

Effective January 31, 2023, the existing N100, N200, N500, and N1,000 banknotes will cease to be accepted as a medium of exchange for any transaction conducted in Nigeria, the Central Bank of Nigeria had said.