The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmad, has disowned the announcement by the Central Bank of Nigeria (CBN) that the naira would be redesigned and released on December 15, 2022.
She was responding to a question raised by Senator Opeyemi Bamidele (Ekiti Central) on Friday during 2023 budget defence session she had with the Senate Committee on Finance and warned the CBN of consequences that may arise from the policy.
Bamidele had told the minister that the repercussion of the CBN’s announcement on the value of naira to the US dollar was being felt barely two days after it was made.
He said: “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.”
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.
She said: “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 merit 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.”.
Also in response to a question asked by Senator Adamu Aliero (Kebbi Central) on the need to take bold and decisive action on oil subsidy removal since in actual sense most Nigerians don’t buy the product at official price, the minister said she was an advocate of subsidy removal.
She said, “You know, in government, there are several layers of decision making. As Ministry of Finance we review the fiscal policy and make recommendations and recommendations are reviewed by the Federal Executive Council (FEC) and then the MTEF and the budget l reviewed and approved by FEC, then they come to the legislature for implementation.
“When we did our initial review for the MTEF for full year was N6.7 trillion. We recommended for half year, which is N3.3 trillion. When discussion at the parliament was going on, we suggested let us reduce that half year by half, but it didn’t pass.
“If it is up to us in the Ministry of Finance we should have removed subsidy a long time ago. We even tried in 2020; it was removed but there was a reversal. In 2021 we made provision to exit half year, it was also reversed and even caused an amendment of the Appropriation Act.
“It is a collective decision and what we are glad about now is that Nigerians themselves are the ones asking for the removal because people now understand what we have been saying, that the benefits that we think the oil subsidy is serving for the people is not actually benefiting the people. It is not the people that need the subsidy that are enjoying the subsidy. And the cost is too high, this time we cannot afford it.”
Meanwhile, the CBN says it followed the law and due process to carry out the naira redesign 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 the due process in its policy actions.
According to have m, 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.
Urging Nigerians to support the currency redesign project, Nwanisobi said it was in their overall interest.
He argued that some persons were hoarding significant sums of banknotes outside the vaults of commercial banks, a trend that should not be encouraged by anyone who means well for the country.
The spokesman noted that currency management in the country had faced several escalating challenges which threatened the integrity of the currency, the naira, and the country, adding 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.
While assuring Nigerians that the currency redesign exercise was purely a central bank exercise and not targeted at any group, he 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 e-Naira.
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.
