New naira: Gbajabiamila faults Buhari, knocks Emefiele over CBN policy

The Speaker of the House of Representatives, Femi Gbajabiamila, has criticised the declarations made by the President, Major General Muhammadu Buhari (retd.), on new and old naira notes in a national broadcast on Thursday morning as negating the ruling by the Supreme Court.

Gbajabiamila, while commending the President for his intervention, stated that the Supreme Court had ruled that the old N1,000, N500 and N200 notes remain legal tender.

“It is not to the benefit of our country for the Federal Government to act in ways that suggest a wanton disregard for the rule of law,” he stated.

The speaker, in a statement issued on Thursday, which he personally signed, said Governor of the Central Bank of Nigeria, Godwin Emefiele, had failed to publicly admit error in the monetary policy of the apex bank.

The PUNCH reports that Buhari, while addressing the nation, had said the old N500 and N1,000 banknotes were no longer legal tender in the country. He, however, said the old N200 note would be legal tender for the next 60 days, till April 10, 2023, while urging Nigerians to deposit their old N500 and 1000 notes with the CBN.

Gbajabiamila said, “Today, citizens and visitors are experiencing grave and unnecessary hardship across our country. They spend hours and days queuing at banks and teller machines to receive stipends of their own money to afford life’s necessities. This situation is a consequence of the flawed implementation of the naira redesign policy by the Central Bank of Nigeria. It is also the result of decisions made by the Central Bank’s Governor, Mr Godwin Emefiele, to refuse counsel, be guided by precedent or abide by the decisions of superior courts.

“Section 20(3) of the Central Bank of Nigeria Act, 2007 provides the statutory authority for the Central Bank of Nigeria to initiate and implement policies for the recall of Nigerian currency. The extant provision is reproduced below: Notwithstanding subsections (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 thereof and any note or coin with respect to which a notice has been given under this sub-section, shall, on the expiration of such notice cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.”

The Speaker noted that there are three conditions precedent for the CBN to recall existing naira notes. According to him, the first is that the permission of the President must be obtained, and the second is that reasonable notice shall be given, and the third is that the apex bank shall pay the face value of the recalled currency upon receipt.

“Whereas reasonable people may disagree as to whether sufficient notice was given for the implementation of this policy, it is evident that the CBN has failed woefully in its statutory obligation to pay the face value of the recalled currency in the form that is useful to the citizens whose current suffering could have been avoided,” he stated.

Gbajabiamila added that the scarcity of cash is happening “because the CBN did not sufficiently replace the old currency it pulled out of circulation across the country.” According to him, this created an artificial scarcity that “put significant additional pressure on the already epileptic electronic banking channels, resulting in a near-complete collapse of trade in the country.” He stressed that businesses cannot operate as neither they nor their customers have access to cash while the electronic banking platforms “appear to have uniformly collapsed.”

The statement further read, “It is unclear what interest is served by persisting in this erroneous course towards an unfolding economic disaster that the country cannot afford. The ongoing devastation of livelihoods is bound to have consequences long after this moment has passed.

“It is disheartening that the CBN has resolutely refused to admit error and change course in the face of mounting evidence that the implementation of this policy has been a devastating failure. It is deeply troubling that neither the intervention of the National Council of State nor an order of the Supreme Court 1s sufficient to cause the Governor of the CBN to review the decisions that have brought us to this entirely avoidable moment.

“This morning, President Muhammadu Buhari, GCFR, announced that he has authorised the Central Bank of Nigeria (CBN) to reintroduce the old N200 notes into circulation, pending when the Bank can make sufficient amounts of the new currency available. This is a step in the right direction and I hope it helps curb Nigerians’ suffering. However, the decision still falls short of the order of the Supreme Court that the old currencies remain legal tender pending the adjudication of a pending suit brought by state governments on the legality of the policy and its implementation. It is not to the benefit of our country for the Federal Government to act in ways that suggest a wanton disregard for the rule of law. It will be better for us to strictly adhere to the court’s order in this matter pending the adjudication of the substantive suit.”

(Punch)