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Naira Redesign Approval: CBN Tackles Finance Minister Over Due Process

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The Central Bank of Nigeria (CBN) has reiterated that it followed due process in its ongoing process to redesign the N200, N500, and N1,000 banknotes.

The spokesman for the CBN, Osita Nwanisobi, made this known on Friday night in response to the Minister of Finance, Budget and National Planning, Zainab Ahmad, who insinuated that her ministry was not carried along by the apex bank.

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 banknotes.

The CBN Act Section 2(b) mandates the Central Bank of Nigeria to be the sole issuer of legal tender currency in Nigeria.

What Sections 18, 19, and 20 of the CBN Act Say

Section 18 provides that:
The Bank shall –
(a) arrange for the printing of currency notes and the minting of coins;

(b) issue, re-issue and exchange currency notes and coins at the Bank’s offices and at such agencies as it may, film time to time, establish or appoint;

(c) arrange for the safe custody of un-issued stocks of currency notes and for the preparation, safe custody and destruction of plates and paper for the printing of currency notes and disc for the minting of coins; and

(d) arrange for the destruction of currency notes and coins withdrawn from circulation under the provisions of section 20 (3) of this Act or otherwise found by the Bank to be unfit for use.

Section 19 stipulates that:

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(1) The Currency notes and coins issued by the Bank shall be –

(a) in such denominations of the Naira or fractions thereof as shall be approved by the President on the recommendation of the Board; and

(b) of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board.

(2) The standard weights and composition of coins issued by the Bank amount of remedy and variation shall be determined by the President on the recommendation of the Board.

Section 20 says:

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(1) The currency notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.

(2) The coins issued by the Bank shall, if such coins have not been tampered with, be legal tender in Nigeria at their face value up to such amount or amounts may be determined, from time to time, by the Bank.

(3) Notwithstanding Sub-sections (1) and (2) of this section, the Bank shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value there and any note or coin with respect to which a notice has been given under this Subsection, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.

CBN Committed To Safeguarding The Integrity Of The Local Legal Tender

Explaining further, 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.

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

He assured Nigerians that the redesign will deepen Nigeria’s push to entrench a cashless economy in the face of increased minting of the eNaira, help to curb the incidents of terrorism and kidnapping, amongst others.

Earlier on Wednesday, the CBN Governor, Godwin Emefiele said the apex bank will issue redesigned N200, N500, and N1,000 notes, effective December 15, 2022, while the new and existing currencies will remain legal tender and circulate together until January 31, 2023.

The Economic and Financial Crimes Commission (EFCC) immediately commended the move and warned currency speculators and Bureau de Change (BDC) operators not to undermine it.

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