New Naira: CBN May Review Policy As NBA Intervenes

The Nigerian Bar Association has said that the law allows Nigerians to redeem their old naira notes at the Central Bank of Nigeria even after the January 31 deadline set by the apex bank for such activity.

Recall that the Federal Government unveiled the redesigned N200, N500, and N1000 notes on November 23, 2022, after which the CBN set a deadline of January 31 for the swapping of the old notes for the redesigned ones and again, extended the date to 10th February 2023.

Even as the deadline has been extended, many Nigerians have been lamenting the hardship as a result of the unavailability of the new notes even when they visit banks to swap the old notes and also Automated Teller Machines to withdraw cash.

The NBA, in a letter signed by its President, Yakubu Maikyau, and addressed to the CBN Governor, Godwin Emefiele, called for an urgent review of the policy. This was disclosed in a statement signed by the NBA National Publicity Secretary, Akorede Lawal, on Saturday.

While lauding the demonetization policy of the CBN as one with the potential to stem corruption, votes buying, and other criminal activities, the NBA President noted that “the necessary logistical, infrastructural and manpower support required for the successful implementation of the policy are in short supply and should be greatly improved upon if they are to be leveraged for full implementation of the policy with minimal loss or economic hardship.”

In the letter, the NBA President expressed concerns that there was no information in the public domain as to what would happen to the old currency in possession of Nigerians by or after January 31 even as the law was clear on this issue.

Quoting the provisions of Section 20 (3) of the CBN Act which provides that “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 thereof and any note or coin concerning which a notice has been given under this sub-section, 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.”

Maikyau noted that “any person who shall have the old notes which have ceased to be legal tender by January 31, 2023, is at liberty to approach the CBN and demand for the redemption of the notes and the CBN is under statutory obligation to “redeem” the notes.”

Given the dearth of information in this regard, the NBA President added that “our recommendation on this issue is that in addition to educating Nigerians on demonetization itself, a campaign on what happens to old bank notes after January 31 should be launched to adequately inform the public on what to do and prevent or reverse the rising panic or agitations caused by concerns about the inability of Nigerians to swap their old notes for the new notes by January 31.”

The NBA President had on Friday paid a visit to the Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, in Abuja, during which he relayed the concerns of the Nigerian people over the demonetization policy of the CBN, particularly given the scarcity of the new notes and the difficulty Nigerians were encountering in swapping the old notes.

The NBA spokesperson, in a statement, said, “The NBA President informed the Minister that he directed the chairmen of the 128 branches of the NBA to survey and assess the impact of the policy on Nigerians in their respective jurisdictions and the aggregate of the report thus far indicated that banking facilities are being overstretched and citizens are uncertain about the policy. Mr. Maikyau noted that the worse hit is the underprivileged citizens whose life assets may not be up to N10,000 and who do not have access to the new notes and may therefore be denied their hard-earned money in the old naira notes. The NBA President recalled that the government ought to avoid the repeat of the harsh experiences of Nigerians in 1984 when a similar demonetization policy reportedly claimed the life of a trader who committed suicide because he was stranded with about NGN 200,000 of the old notes.”

Maikyau told the minister that “the President, Major General Muhammadu Buhari (retd.), may have been wrongly advised on the policy because by the provisions of the CBN Act, the power of the CBN to call in any of its notes or coins, otherwise described as demonetization, can only become operational upon the directive of the President after giving reasonable notice for the recall.

“From the clear wording of the section, these two conditions must coexist before the power to call any of the notes or coins by the CBN can crystallize. The questions that have trailed this policy from our consultations include: “Was there a directive of the President? And where there was one, could it be said that the notice given amid the prevailing circumstances was reasonable? The questions seek to interrogate the process leading to the policy and justify the need for extension of the timelines for its implementation.”

He lamented that Nigerians were only given 45 days to swap the old notes for new ones, pointing out that when a similar policy was introduced in an advanced economy as the United Kingdom’s, the government had announced a date for demonetization 18 months in advance.

In her response, the Minister of Finance said the government was aware of the concerns over the policy and that the ministry would reach out to the CBN in a bid to consider revisiting the January 31 terminal date of the demonetization policy.

(PUNCH).