While the CBN told the Senate that it had the power to carry out a comprehensive review of the country’s currency , the Senate said the apex bank’s independence was limited.
The Director, Corporate Communications Department, CBN, Mr. Ugochukwu Okoroafor, had told journalists at a press conference in Abuja that the Banks and Other Financial Institutions Act and the CBN Act of 2007 was very clear “on who does what.”
He said, “We are aware of the message from the Senate and we have also heard about the very conciliatory stance of the House of Representatives.
“But it is important to note that the law is very clear on what our responsibilities are; it’s very clear on the process as far as this matter is concerned and we are completely within our mandate and we have made that point clear and there is no problem because the law is very clear on who does what.”
Section 17, 18 and 19 of the CBN Act of 2007 gives the apex bank the right to issue currency note as approved by the President on the recommendation of the CBN board.
Among other things, the relevant sections says, “The bank shall have the sole right of issuing currency notes and coins throughout Nigeria and neither the Federal Government nor any State Government, Local Government, other person or authority shall issue currency notes, bank notes or coins or any documents or tokens payable to bearer on demand being document or token which are likely to pass as legal tender.
“The bank shall arrange for the printing of currency notes and the minting of coins; issue, re-issue and exchange currency notes and coins at the bank’s offices and at such agencies as it may, from time to time, establish or appoint; 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of currency notes and disc for the minting of coins; and arrange for the destruction of currency notes and coins withdrawn from circulation under the provisions of section 20 (3) of this Act or otherwise found by the bank to be unfit for use.”
But the Leader of the Senate and a Senior Advocate of Nigeria, Victor Ndoma-Egba, told one our correspondents on Thursday that, “The independence of the CBN is not at large. There are limitations to that independence.
“It is that limitation that led to the CBN Act which requires the bank to submit its report to the National Assembly.”
The Senate had on Monday directed the CBN to stop the implementation of the proposed review of the nation’s currency denominations.
Chairman of the Senate Committee on Banking, Bassey Otu, had said that only a major currency crisis could warrant a review, urging the CBN to provide proper basis to the National Assembly for the review exercise.
The House of Representatives also on Thursday said that though the CBN had autonomy, it was its duty to protect Nigerians if any policy would adversely affect them.
Chairman, House Committee on Banking and Currency, Mr. Chukwudi Onyereri, said, “Whereas we fully respect the separation of powers as enshrined in the (1999) Constitution and the Central Bank’s autonomy as provided by the Central Bank Act 2007 as amended as well as the Banking and Other Financial Institutions Act, we have a responsibility to the Nigerian people to engage the Executive arm of government on issues that may have a far-reaching effect on the national economy.”
He added that the planned policy would be implemented by the end of the first quarter of 2012.
Okoroafor, however, said the introduction of the N5,000 note was to satisfy the demand of those who desired it.
He explained that the introduction of the new notes would lead to the phasing out of the polymer notes which he described as a failure.
He said, “We are aware of the message from the Senate and we have also heard about the very conciliatory stance of the House of Representatives.
“We have since engaged the National Assembly and I will like to point out that it ( National Assembly) has the constitutional right to call any ministry, department and agency of government to come and explain and I think that is what they are doing.
“We have met them informally because they are on recess and we have very fruitful deliberations and we are waiting for them to resume on October 17 and we will formally engage them.”
“The currency notes and coins issued by the bank shall be in such denominations of the naira or fractions thereof as shall be approved by the President on the recommendation of the board; and of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the board.”
The apex bank had in 2009 converted the N5, N10, N20 and N50 notes to polymer, arguing that the conversion would ensure their durability.
The CBN spokesman insisted that the currency review was in line with the apex bank’s cashless policy initiative. He added that the cost of currency management which the cashless policy is meant to achieve would be reduced.
Okoroafor said, “Nigeria spends much money in printing and destroying currency and the cashless policy is meant to reduce cost of managing currency.
“With the introduction of the N5, 000 notes, the amount that would have been used to print five N1, 000 notes will now be spent on just one N5, 000 thereby reducing the amount of tax payers’ money spent on currency management.”
Culled from Naija Pundit
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