The Nigerian Senate has called on the Central Bank of Nigeria, CBN, to shift the deadline for the expiration of old naira notes by six months. The date should be extended to June 30, 2023, the Senate said contrary to the January 31, 2023 earlier set by the apex bank.
Following the redesigning of the N200, N500 and N1000 notes, Godwin Emefiele, the CBN Govenor had announced that the these denominations would no longer be legal tender by the end of January next year.
This development generated mixed reactions in the public and financial sector, but the CBN said it is within its powers to do so.
But on Wednesday, the nation’s upper legislative chamber urged the government bank to reconsider its decision to and move the date forward, following a motion by Senator Ali Ndume who cited Orders 41 and 51 to seek the leave of the Senate to move a motion to that effect.
Ndume was supported in the motion by Senators Adamu Aliero and Aliyu Wamako who said the extention is necessary in the interest of Nigerians.
While ruling on the motion, Senate President Ahmad Lawan advised the Emefiele-led CBN to ‘urgently’ extend the deadline to June next year.
The CBN had last month announced its plan to phase out the old naira banknotes, it also announced a cap on cash withdrawal by individuals and corporate bodies which it later reviewed last week to N500 , 000 and N5 million weekly, respectively.
The redesigned banknotes will, among other things, curtail excess cash outside of the banking system whilst combating inflation.
The deadline for phasing out the old N200, N500 and N1000 banknotes is January 31, 2023.
The CBN later reviewed its policy on cash withdrawal limits, increasing weekly withdrawals for individuals and corporate organisations to N500, 000 and N5 million, respectively.
Emefiele hinged the apex Bank’s decision to review the cash withdrawal limit on public interest, saying feedback from Nigerians supports the review.
The CBN Governor said, “Currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007. Indeed, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.
“In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.
“In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes. Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has not been redesigned in the last 20 years.”
“It was based on these trends, problems, and facts, and in line with sections 19, subsections a and b of the CBN Act 2007, that the management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.
“In line with this approval, we have finalized arrangements for the new currency to begin circulation on December 15, 2022. The new and existing currencies shall remain legal tender and circulate together until January 31, 2023, when the existing currencies shall seize to be legal tender.”
Meanwhile, the magazine has learned from competent forces in the apex bank that it’s not considering any review for now.
