`The CBN power to redesign the currency and the position of the law
The governor of Central Bank of Nigeria (CBN) Godwin Emefiele announced on Wednesday, October 26th that the apex bank had obtained approval from the president to redesign some of the Nigerian currency notes. The notes in question include the N200, N500, and N1000 notes.
According to him, in line with provisions of Sections 2(b), section 18(a), and section 19, Subsections a and b of the CBN Act 2007, the Management of the CBN has sought and obtained the approval of President Muhammadu Buhari to redesign, produce, release and circulate new series of banknotes at N200, N500, and N1,000 levels.
Meanwhile the announcement was greeted with lots of excitement from the members of the public.
The Ministry of Finance Were Not Consulted
However, confusion and controversy has become the new order since the outburst by the country’s minister of finance.
The minister of finance Zainab Shamsuna Ahmed revealed in a budget defense session that she was not consulted before the new central bank’s policy to change the N200, N500 and N1,000 notes was announced. In fact, according to her, the ministry only got to know about the announcement in the media.
However, The central bank governor has responded to the comment by saying that he does not need the consent of anyone except that of the president to implement the policy.
So, let’s take a look at what the law says about CBN power and the redesign of the currency.
Let’s start with the sections of the CBN Act cited by Governor Emefiele during his press briefing.
Excerpts of Sections 18, 19, and 20 of the act
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(d) arrange for the destruction of currency notes and coins withdrawn from circulation under the provisions of section 20 (3) of this Act or otherwise found by the Bank to be unfit for use.
(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.
(1) The currency notes issued by the Bank shall be legal tender in Nige 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.
Therefore, from the various sections of the law as seen above, it does appear as if Mr. Emefiele is right.
The country have different ministries, departments and agencies and each of them have their different roles as it pertains to the strengthening of the economy.
And so far, it does appear that CBN is still acting within the limit of its power to redesign the currency.