Naira Redesign : Finance Minister disowns policy, warns CBN of consequence
Two days after the Central Bank of Nigeria (CBN) announced plans to redesign the Naira beginning from
December 15, 2022 , the Minister of Finance , Budget and National Planning , Zainab Ahmad has expressed contrary views and that of her ministry about the policy .
In response to question raised by Senator Opeyemi Bamidele ( APC Ekiti Central) during 2023 budget defence session with Senate Committee on Finance , the Minister warned the CBN strongly against some underlying consequences of its action .
Bamidele had in his question told the Finance Minister that the multiplier effects of the policy on the value of Naira to US dollar was already being felt barely two days after announcement of the policy by CBN
” Just two days after announcement of the policy , value of Naira to a US dollar has risen from N740 to N788 to a US dollar due to rush in exchange of stacthed Naira Notes for foreign currencies , particularly dollar .
” To me , the policy may be a well conceived one , but the timing going by realities on ground , is very wrong as the Naira may fall to as low as N1,000 to a US dollar before January 31, 2023 fixed for full implementation of the policy,” Bamidele said .
Speaking further, the Minister denied any knowledge of the move by the apex bank, saying she and her Ministry were not aware of the policy but merely heard of it from pages of newspapers.
” 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 value of Naira to other foreign currencies.
“I will however appeal to this committee to invite the CBN governor for required explanations as regards merits of the planned policy and rightness or otherwise of its implementation now “, she said .
The CBN Governor , Godwin Emefiele had on Wednesday said that the apex bank would redesign the country’s currency from 200 Naira denomination to N1,000 notes .
He explained that the policy was taken in order to take control of the currency in circulation just as he posited that the bulk of the nation’s currency notes were outside bank vaults and that the CBN would not allow the situation to continue.
The planned policy he added , was in line with Sections 19, Subsections a and b of the CBN Act 2007, upon which the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N200, N500, and N1,000 levels.
The next question came from
Senator Adamu Aliero(PDP, Kebbi Central ) who wanted the Finance Minister to respond to the issue of fuel subsidy payments and why Nigeria should continue to bear the burden at a time when the country’s revenue has continued to fall even in the face of rising level of borrowing.
Aliero’s question was supported by the Chairman of the Committee, Senator, Solomon Olamilekan who completey dismissed the whole idea of subsidy describing it as “racketeering” which he said should be stopped.
Responding, the Minister of Finance said the decision to maintain subsidy payment of N3.6 trillion in the 2023 budget was a joint decision by all tiers of government including the Presidency and the National Assembly.
She said left to her, the subsidy regime would have been eliminated long ago.
