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Senators, Reps draw battle line with CBN over naira notes - THE NATION

JANUARY 25, 2023

Lawmakers seek six-month extension

•Tuesday deadline sacrosanct, apex bank insists

The controversy over the January 31 phaseout deadline for old naira notes has not abated.

Senators and House of Representatives members asked the Central Bank of Nigeria (CBN) to grant a six-month extension and allow the redesigned notes to remain legal tenders alongside the new N1000, N500 and N200 bills.

But, the apex bank insisted that the date remains unchanged.

The lawmakers’ request was based on outcry from their constituents that the new notes are scarce and difficult to get from the banks

But the CBN Governor, Mr. Godwin Emefiele, insisted that the Tuesday deadline to phase out the use of the old notes is sacrosanct.

The Senate and House of Representatives are suggesting a gradual phase-out of the old currency.

This is because the CBN Act guarantees its independence to initiate and implement monetary policies.

The CBN Act saddles the Monetary Policy Committee (MPC) with the responsibility for formulating monetary and credit policy.

The curtain dropped yesterday on the MPC’s 289th meeting, its first meeting for this fiscal year.

At the end of the meeting, the MPC raised the interest rates by 100 basis points from 16.5 per cent to 17.5 per cent.

Restating the January 31 deadline after the Monetary Policy Committee (MPC) meeting in Abuja, Emefiele said the 90 days window given by the CBN for Nigerians to deposit their old currencies was enough.

He said: “We called on the Deposit Money Banks (DMBs) to extend their working hours and to work on weekends. There is no reason to talk about a shift. The new currencies are available.”

Emefiele said the apex bank had mandated banks to feed the new notes into their Automated Teller Machines (ATMs) for Nigerians to have equal access.

He said: “We have increased disbursement of the new notes to them. There is an adequate quantity of new notes available.

“Our mint is producing and we are supplying the banks. We have super agents in underserved areas like riverine communities, and CBN staff members have been out on mobilisation.

“We believe that by January 31, the new naira notes would have permeated the nooks and crannies of the country.”

According to him, the apex bank has so far received about N1.5 trillion of the old naira notes.

He urged Nigerians to accelerate the process of taking their old notes to the banks before the deadline, adding that they should not fear harassment for security agents.

Emefiele added: “We have begged the EFCC and the ICPC to allow Nigerians to deposit their old naira notes.”

But, it was learnt yesterday that some banks were rationing the redesigned notes for customers who could not withdraw above N20, 000 of the new notes from the ATM.

At the Senate, Senator Sadiq Umar (APC-Kwara North) moved a motion on the floor of the Red Chamber for CBN to extend the use of old naira notes till July 31.

The upper chamber had on December 28 last year advised the CBN to extend the phasing out of old currency notes as scheduled for six months.

In his lead debate, the Kwara senator said the call has become necessary, in view of the financial hardship the “rushed” phasing out of the old naira notes would inflict on Nigeria, especially the rural populace, who don’t readily have access to banking facilities.

He argued that the redesigned bills have been scarce and therefore not available for those wishing to change their money to the new notes.

The senator said: “This is a motion for the extension of the use of the old naira notes from January 31, 2023, to July 31, 2023.

“The Senate recalls that we had a resolution in this chamber on December 28, 2022, for the CBN to extend the use of the old notes for six months as well as increase the maximum withdrawal limits permissible.

“The Senate is aware that the withdrawal limit has been increased to N500,000 weekly for individuals and N5 million weekly for corporate organisations.

“However, the CBN is insisting on terminating the use of old naira notes by the end of this month, which is barely a week away.

“Observes that there are not enough new notes in circulation and in fact, the banks’ ATMs that should be dispensing the new notes are still dispensing only the old notes and citizens still have a lot of old notes that they are unable to deposit in banks. And right now, there are uncontrollable queues in several states in the country.

“The Senate notes that experiences around the world have shown that such abrupt decisions if not controlled as being planned by the CBN created chaos and plunged the economies into crises, a very good case in India.

“However, in countries that operate with order as seen in the United Kingdom, new notes are currently in circulation and they are running smoothly along with the old currency.

“The Senate, therefore, resolves that the CBN should immediately extend the use of the old notes by six months – that is from January 31st to July 31st, 2023 with immediate effect.”

The motion got the backing of many senators in their contribution, but Senator Sam Egwu (PDP- Ebonyi North) opposed it.

In the Green Chamber, members urged the apex bank to review the cashless policy and review the deadline.

The House called a phased withdrawal that would last for six months in line with global practice and not force out the currency.

Adopting a motion of urgent public importance brought to the House by Rep. Sada Soli (APC, Katsina), the House called for President Muhammadu Buhari’s intervention and ensure that the apex bank review the policy in the interest of the people.

The lawmakers resolved to meet with representatives of the managing directors of the banks today to find out the availability of the new notes since the CBN has insisted that the new notes were available for the banks to take.

Soli argued that the January 31 deadline, if allowed to stand, would bot a lot of rural dwellers who lack access to banking services.

He argued that globally, currencies are phased out and not forced out of circulation, pointing out that what the CBN is trying to do is to force our old currency from circulation.

The lawmaker cited the complaints from across the country of traders rejecting the old currency notes, leading to an increase in prices of food items, while the banks complain that the new currencies are not available.

He regretted that despite appeals by the National Assembly, the Nigeria Governors’ Forum (NGF) and other stakeholders, the CBN has remained adamant, insisting that the old notes must be phased out by the end of the month.

House Speaker Femi Gbajabiamila said even though the CBN is making efforts to enlighten Nigerians on the policy, the efforts may not have been enough as certain things should have been put in place before the policy comes into effect.

He said while the policy is a good policy, the modus and time frame remain the major challenge and therefore, the need to review the policy since it will not amount to a policy summersault.

Also yesterday, the Human Rights Writers Association of Nigeria (HURIWA) faulted the introduction of the cash swap scheme just a week before the January 31 deadline for demonetisation of the old notes.

The group sought a one-year extension deadline for all Nigerians, especially those in remote and unbanked areas to exchange their old notes for new ones, citing the example of the United Kingdom, which unveiled its new notes on December 20, last year, but gave a 2024 deadline for banks to still swap old pound sterling for the new ones.


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