The Central Bank of Nigeria declared on Sunday that it would phase out obsolete currency notes by February 10; however, the House of Representatives has rejected this date.
The New Naira Redesign and Naira Swap Policy Ad hoc Committee of the House of Representatives referred to the new date as only a political ploy to further mislead Nigerians and harm their economic and social well-being on Sunday.
The development happened as resentment about the shortage of replacement notes spread throughout the nation and some bank customers were left stranded. While there are lengthy lines at ATM galleries all throughout the country, retailers and traders have been refusing the old notes.
However, Major General Muhammadu Buhari (ret.) authorized the deadline to be extended to February 10 during their latest meeting, according to CBN Governor Godwin Emefiele, who announced the revised deadline for the phase-out of the old N1,000, N500, and N200 notes on Sunday.
Additionally, he provided an additional seven days for Nigerians to deposit their old naira notes before they lose their legal tender status on February 10.
The CBN had previously set a deadline of January 31 for the exchange of obsolete N1,000, N500, and N200 notes.
The central bank had been under intense pressure and harsh criticism from the National Assembly, lawmakers, banks, clients, and other critical stakeholders before extending the deadline, but it had refused to change its position.
The CBN governor had also missed four appearances before the House, which caused the Speaker of the House of Representatives, Femi Gbajabiamila, to proclaim on Tuesday that he was prepared to issue an arrest warrant against him if he missed last Thursday’s committee meeting.
The lawmakers would reassemble on Tuesday (tomorrow), according to Gbajabiamila, to take action against Emefiele and other bank executives who disregarded the house’s summons.
CBN extends the due date
However, the CBN governor emphasized in his statement that the currency redesign effort was essential to enable more effective monetary policy decisions in addition to reducing banditry and ransom-taking.
Emefiele claimed that the CBN has neglected to redesign the naira for 19 years, despite the fact that this task should typically be completed within a five- to eight-year span.
Emefiele listed the advantages and qualities of the redesign, saying, “Our fundamental goal is to make our monetary policy decisions more effective, and as you can see, inflation has started to trend lower and exchange rates are rather stable.
“Second, we intend to support our Security agencies’ efforts through this initiative to battle banditry and ransom-taking in Nigeria, and we can see that the military is making good success in this crucial work in Nigeria.”
The apex bank has recovered N1.9 trillion from the N3.23 trillion in notes that are in circulation and the N2.7 trillion that are stored in people’s houses, he said, leaving N900 billion to be reclaimed from those who are hoarding the notes.
“Ladies and Gentlemen, accessible data from the Central Bank of Nigeria has showed that in 2015, there was just N1.4 trillion in circulation,” he said. The amount of money in circulation reached N3.23 trillion as of October 2022, of which only N500 billion was retained by the banking sector and N2.7 trillion was kept indefinitely in people’s homes.
Usually, when the CBN releases money into circulation, it is intended to be utilized and, after some period of time has passed, it is returned to the CBN, keeping the amount of money in circulation firmly within the CBN’s control.
The CBN governor stated, “So far and since the start of this scheme, we have collected around N1.9tn, leaving us with about N900bn.
According to him, the president approved a 10-day extension of the deadline, from January 31 to February 10, 2023, “to enable the collection of more old notes lawfully held by Nigerians and achieve more success in cash swap in our rural communities, after which all old notes outside the CBN loses its legal tender status.”
Together with representatives of the EFCC and ICPC, our CBN personnel, who are now on mass mobilization and monitoring, will cooperate to accomplish these goals.
After the revised deadline, there will be a seven-day grace period, he noted.
In accordance with sections 20(3) and 22 of the CBN Act, he added, “a seven-day grace period, beginning on February 10 to February 17, 2023, allows Nigerians to deposit their old notes to the CBN after the February deadline when the old currency would have lost its legal tender status.”
Nigerians were urged by the CBN governor to cooperate with the bank in order to ensure a smooth implementation of the program.
Emefiele also noted that the CBN regularly meets with banks to provide them with guidance in the collection of old notes and distribution of new notes.
He said that there is an ongoing nationwide sensitisation through collaboration with the National Orientation agency to reach Nigerians across multiple channels.
New deadline rejected
The Ad hoc committee, led by Majority Leader of the House of Representatives Alhassan Ado Doguwa, was unimpressed by the new deadline and refused the extension, saying that the CBN must adhere to sections 20 sub 3, 4, and 5 of the CBN Act.
The ad hoc committee to investigate into the matter was established by the Lower House during its meeting on last Tuesday.
In a statement released on Sunday, Doguwa expressed his unhappiness, saying, “The 10-day extension for the exchange of the old naira notes is not the solution. Only the clear conformity with section 20 sub-sections 3, 4, and 5 of the CBN Act would be acceptable to us as a legislative committee with a constitutional mandate from the House.
“Nigeria must uphold the rule of law as a burgeoning economy and budding democracy. To compel the CBN Governor to appear before the Ad Hoc committee, the House would then go ahead and sign an arrest warrant.
He stated that the committee would continue working under his leadership until the needs of Nigerians were met in conformity with the law.
The extension, according to Doguwa, is merely a political ploy to further mislead Nigerians and aggravate their economic and social conditions. The CBN governor must appear before the committee or run the risk of being detained under the authority of parliamentary writs that the Speaker signed on Monday.