Cashless Economy: CBN clarifies Bank follows due process in new Naira redesign

*The Central Bank of Nigeria restates the Bank duly sought and obtained the approval of President Muhammadu Buhari ‘to redesign, produce, release and circulate new banknotes’, assuring consumers the currency redesign will further entrench a cashless economy along with increased minting of the eNaira

Gbenga Kayode | ConsumerConnect

The Central Bank of Nigeria (CBN) has said  the Bankers’ Bank followed due process in its effort at ongoing redesigning N200, N500, and N1,000 banknotes respectively.

The apex bank’s latest clarification is considered a direct response to Friday’s claim by Mrs. Zainab Ahmed, Minister for Finance, Budget and National Planning, that her office was neither consulted nor aware of the CBN plan in regard to the banknotes redesigning, production and circulation process.

The Minister, at the 2023 Budget defence session in the Nigerian Senate in Abuja, FCT, had replied to a Senator’s question on the possible link between planned release of the new Naira notes and higher exchange rate with the Dollars within days after the CBN announcement.

Mrs. Ahmed stated: “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 merits 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 the value of the naira to other foreign currencies.”

ConsumerConnect reports Mr. Osita Nwanisobi, Director of Corporate Communications at CBN,  Friday night, however, expressed “surprise at the Minister’s claim.”

Nwanisobi noted that the “CBN remains a very thorough institution that follows due process in its policy actions.”

He stated that 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 in the country.

He also said that currency management in Nigeria had faced several escalating challenges, which threatened the integrity of the currency, the CBN, and the entire country.

According to Nwanisobi, every top-rate Central Bank is committed to safeguarding the integrity of the local legal tender, the efficiency of its supply, and its efficacy in the conduct of monetary policy in an economy.

On timing of Naira redesign project

In respect of the period of executing the Naira redesign project, the CBN Director further explained that the Bank had even tarried for too long, considering that fact that it had waited for 20 years to effect a redesign

Nwanisobi as well stated that the standard practice, globally, is for Central Banks to redesign, produce and circulate new local legal tender every five to eight years.

The Bank, therefore, reassured the Nigerian consumers of financial products and services, that the redesign would deepen the country’s move to entrench a cashless economy in the face of increased minting of the eNaira.

Besides, the effort promises to help in curbing the incidence of terrorism, and kidnapping, among others in Nigeria, he added.

It is recalled Mr. Godwin Emefiele, Governor of CBN, Wednesday, October 26, 2022, had disclosed would issue redesigned N200, N500, and N1,000 banknotes, effective December 15, 2022.

Emefiele noted that the new and existing currencies will remain a legal tender and circulate together until January 31, 2023.