It is no longer news that the Governor of Nigeria's Central Bank, Godwin Emefiele had on Wednesday announced plans by the bank to redesign the 100, 200, 500 and 1,000 naira notes by December.
But what seems like a cloak in the wheel of this project is the recent statements made by Nigeria's Minister of Finance, Budget and National Planning, Zainab Ahmed, who has kicked against the plans by the Central Bank of Nigeria (CBN) to redesign some naira notes, stating that her ministry was not aware of the plans and only knew about it through the media.
She said this on Friday when she appeared before the Senate Committee on Finance for the ministry's budget defence session.
Her comments come barely 48 hours after the CBN Governor, Godwin Emefiele, announced the plan to redesign the 100, 200, 500 and 1,000 notes which will go into circulation in December.
The plan is to redesign N100, N200, N500, and N1000 and start disbursing by December and by January 31, 2023, the old notes are expected to be out of circulation.
The CBN governor had said the move is aimed at having control of the currency in circulation, managing inflation, and tackling counterfeiting.
Mr Emefiele had said currency management has faced several daunting challenges that have continued to escalate in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.
The CBN boss further explained that the planned redesign was in line with Sections 19 (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.
I wasn't consulted – Finance Minister
But while responding to a question from a member of the committee, Opeyemi Bamidele (APC, Ekiti) on proposed plans, Mrs Ahmed said the planned redesign of some naira notes portends some consequences.
Mr Bamidele had noted that two days after the announcement, the exchange of Naira to a US dollar has risen from N740 to N788 to a US dollar – due to a rush in the trade of stacked naira notes for foreign currencies, particularly the dollar.
"The policy may be a well-conceived one but the timing going, by realities on the ground, it's very wrong as the naira may fall to as low as N1,000 to a US dollar before January 31, 202,3 fixed for full implementation of the policy," he said.
The finance minister said she and her ministry's officials were not aware of the policy but only learnt of it from the media.
"We were not consulted at the Ministry of Finance by the CBN on the planned naira redesigning and cannot comment on it as regards merits or otherwise," she said.
"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 Naira to other foreign currencies," she said.
Mrs Ahmed appealed to the committee to invite the CBN governor for required explanations as regards merits of the planned policy and rightness or otherwise of its implementation now.
The CBN's plan to replace higher naira notes has drawn criticisms over the duration the bank says it will allow for users to exchange old notes. But analysts have spoken more about the impact the policy will have on the currency as a scramble by holders of illicit money to change their cash into dollars further drives up the exchange rate, further weakening the naira.
A former deputy governor of the CBN, Kingsley Moghalu, said the duration allowed by the bank is short and "could create huge operational pressure on banks and some traders may prematurely reject the existing currency notes once the new ones come into circulation."
He, however, said the "move is a necessary step to tighten money supply and battle high inflation".
According to Bloomberg, the International Monetary Fund advised that Nigeria take caution to avoid any missteps that could undermine confidence in the financial system.
The Fund's resident representative, Ari Aisen, said the IMF had reached out to the CBN to get more information on the plan which was announced on Wednesday.
"We stand ready to provide any assistance as needed," the official was quoted by Bloomberg as saying.
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