Follow Us on Google
By Chinwendu Obienyi
Financial experts have said the brewing crisis between the Ministry of Finance and Monetary authorities over the redesigning of the Naira could reduce the country’s currency value and pose significant dangers to the economy.
This is coming after the Central Bank of Nigeria (CBN) refuted claims by the Ministry of Finance that it was not consulted on plans to redesign the Naira, stating that the due processs was followed. The bank said it had also secured all legal approvals, including President Muhammadu Buhari’s nod, to carry on the exercise, which is 12 years due.
While responding to a question raised by Senator Opeyemi Bamidele (APC Ekiti Central) during 2023 budget defense of her ministry and the grave consequences if CBN goes ahead to implement it, the Finance Minister, Mrs Zainab Ahmed, said the finance ministry was not consulted on the planned Naira redesigning and cannot comment on its 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 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.
But the apex bank had since fired back and expressed surprise at the minister’s claim, stressing that the CBN remains a very thorough institution that would never vandalise due process rules in its policy actions.
Speaking with newsmen in Abuja, at the weekend, the Spokesman of the CBN, Osita Nwanisobi, said 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 series of N200, N500, and N1,000 banknotes.
Subsequently, President Muhammadu Buhari, threw his weight behind the CBN, stating that the country would gain a lot from the exercise. Buhari, according to a statement issued by his spokesman, Mallam Garba Shehu, said the CBN’s decision had his support.
However, experts who spoke to Daily Sun via telephone and emails, said there was absolutely no need to redesign the Naira as it amounts to economic waste.
According to them, it is sad and unfortunate that this clash is coming at a time the country has several issues to contend with.
The National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, said the redesigning the Naira has no bearing on the economy, adding that this will not reduce inflation.
“The redesigning will not be free and it will not even be done in Nigeria, rather it will be done outside. Will it bring down inflation? Will the Naira compete with the dollar, pound sterling or any other currency in the world? For me, it is a wasteful exercise in futility and what the CBN needs to do is to shore up the Naira so that it can add value.
I align myself with the Ministry of Finance, there is no need for that and if they said they were not consulted, then they were not because the redesigning has to be approved by the executive council and knowing that Emefiele is not a member of the executive council but just a CBN regulator. The President cannot just issue a letter without the National Assembly approving it and so it is very unfortunate at the way this country is being run. There is no cohesion at all with the Finance Ministry and the monetary authorities and since they are divided, this portends danger for the economy”, Okezie said.
For his part, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said it was difficult to see any compelling value proposition of the currency redesign idea.
Yusuf said the cost of such an action would be outrageous and disproportionate compared to the expected benefits advanced by the CBN.
“At a time when the government is grappling with high fiscal deficit, debt crisis, severe revenue crisis and underfunding of many government projects and programmes, it is most inappropriate to embark on such a profligate exercise. Currency as a percentage of money supply is less than seven per cent,” he stated.
