Senate Backs CBN on Naira Redesign After Rowdy Session
November 17, 2022
The Senate has resolved to provide legislative support to the Central Bank of Nigeria (CBN) for the redesign of the N1,000, N500 and N200 naira notes.
The upper chamber made this resolution after a heated debate on a motion moved by Senator Uba Sani on CBN’s policy to redesign the three naira notes.
But majority of Senators across party lines supported the redesign of the naira but some of them were concerned about the deadline set by the apex bank for the old notes to be deposited in commercial banks.
THISDAY gathered that call by the lawmakers for a shift in the January 31, 2023 deadline for the old banknotes to be withdrawn from circulation, to April 2023, was to enable them offload the cash they had stockpiled for elections. THISDAY had reported on Sunday that politicians who stashed billions of naira outside the banking system to prosecute the 2023 general election were plotting against the reintroduction and redesign of Nigeria’s currency. These politicians, it was learnt, had mobilised the National Assembly to pass a resolution against the naira redesign as several lawmakers may have stockpiled cash for the 2023 general election.
During the debate, lawmakers also questioned the impact of the redesign of the naira note on the economy and if it will help reduce the inflation rate and the dwindling value of the naira.
Sani had in the prayers to his motion urged the Senate to provide legislative support for the policy.
He also urged the red chamber to mandate his Committee to embark on aggressive oversight on the matterIn addition, Sani urged the Senate to support the CBN naira redesign policy including the deadline fixed by the banking sector regulator for compliance.
CBN Governor, Mr. Godwin Emefiele had on October 26, announced a redesign of the currency in the variation of N200, N500 and N1,000. The CBN governor, who pointed out that the change was sequel to the approval of the president, had said circulation of the new banknotes would commence on December 15, 2022.
He had said the development was also aimed at checking the increasing ease and risk of currency counterfeiting evidenced by several security reports, and the increased risk to financial stability as well as the worsening shortage of clean and fit currency, with the attendant negative perception of the central bank.
In support of the initiative, President Muhammadu Buhari last week declared that his government would not go back on it and gave the central bank its backing.However, at the National Assembly yesterday, the rowdy session started when senators Ali Ndume, Abiodun Olujimi, Betty Apiafi, Barau Jibrin, Chukwuka Utazi, and Orji Uzor Kalu, supported the CBN policy but suggested the extension of the deadline for compliance.
Kalu specifically wanted the Senate to invite Emefiele to throw more light on the policy while he should be persuaded to extend the deadline to April 30, 2023.
But Senator Gabriel Suswan disagreed with Kalu and others claiming that the CBN Governor had always shunned the Senate invitations.
He urged his colleagues to ignore the CBN policy.
In his contribution, Senator Bassey Akpan stressed the need to support the CBN Governor. He said there should be no discussion on the matter.
Suswan and Akpan’s submissions did not go down well with those seeking the extension of the deadline and the chamber turned rowdy.
It took the persistent appeals by the presiding officer, the Deputy President of the Senate, Senator Ovie Omo-Agege to resolve normalcy after 10 minutes of hot arguments among the senators.
Omo-Agege said it was the prerogatives of the CBN to redesign the naira and put deadline for compliance.
The Senate after the rowdy session offered to provide legislative support for the policy. It also mandated the Senate Committee on Banking and Financial Institutions to go on oversight.
Senator Ali Ndume had earlier said there were only five banks in the entire 27 local government areas in Borno State since the insurgency started in the state. On her part, Senator Abiodun Olujimi, said one and half month was too short to withdraw all the money in circulation to avoid shutting down the economy.
She said the Senate should invite the CBN Governor for further explanation on the issue.
Also, Senator Betty Apiafi said rural banking had been shut down hence the January deadline should be extended.
She said countering wasn’t enough to change the naira.
She said the implications of the redesign should be criticality examined in view of the fact that bandits have said they would be collecting ransom I’m foreign currencies.
Senator Barau Jibrin, said the naira redesign cannot on its own halt terrorism, but could only reduce it.
Senator Chukwuka Utazi said because of the rural nature of the country, the leadership of the Senate should interface with the CBN Governor. Utazi urged the CBN to visit all rural communities to get first-hand information.
On his part, Kalu, suggested the extension of the deadline from January 31 to April 31 and that the Committee on Banking and Finance should meet with the CBN Governor on the matter.
Sani’s motion was titled: “Re-design of the New Naira Notes by the CBN: A Call for Legislative Support.”
The motion read: “Notes that currency management is a key function of the Central Bank of Nigeria and the integrity of the Naira and efficient supply of banknotes are indicators of a performing central bank, especially in predominantly cash-based economies such as Nigeria;
“Notes also that in recent times, currency management in Nigeria has faced series of challenges that have affected the ability of the CBN to efficiently carry out its mandate of issuing legal tender (i.e., provision of an adequate volume of clean banknotes in the right denominational mix for members of the public);
“Concerned that these challenges will continue to grow in scale, with attendant consequences on CBN and Nigeria’s reputation, if left unaddressed;
“Aware that these challenges are primarily centred around the wholesale hoarding of Naira banknotes by members of the public. Available statistics show that cash outside banks consist of over 80 per cent of Currency-In -Circulation (CIC).”
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