Nigeria’s minister of finance has revealed that she was not consulted before the new central bank’s policy to change the N200, N500 and N1,000 notes were announced.
She made this comment in response to a question from a senator at the budget defense session held on Friday October 28 in Abuja.
Mrs. Ahmed was asked about the timing of the announcement and whether or not this is something that needs to be done at this point considering the challenges in the country which is getting compounded by the policy.
Ahmed Responds: She responded by saying she was not aware of the policy and was neither pre-informed or carried along. She also insisted that the central bank was best to respond to aims of the policy. However, she insisted the policy may have potential consequences for the country at this time
- “We were not consulted, it was an announcement that we heard. It was one of the reasons they gave to mop up liquidity to manage inflation. But there are also consequences and also looking at what will the consequences be. There will be benefits and there will be some challenges and I don’t know whether if the monetary authorities have looked closely at what the consequences are and how they will be mitigated” she said.
Division? – Her comments suggest strong divisions between the central bank finance ministry and the central bank over the management of the country’s economy. The ministry of finance has cited the current exchange rate regime as a challenge to attracting foreign investment.
Response: CBN Governor, Godwin Emefiele later responded to the minister stating that the apex bank does not need the approval of the minister to implement the policy. “With the president’s approval in writing, the central bank does not need to consult anyone else.”
What the law says: Section 20 of the central bank’s 2007 Act gives the apex bank the power to print currencies after obtaining the approval of the president.
20. (1) The currency notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.
(2) The coins issued by the Bank shall, if such coins have not been tampered with, be legal tender in Nigeria at their face value up to such amount or amounts may be determined, from time to time, by the Bank.
(3) Notwithstanding Sub-sections (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 there and any note or coin with respect to which a notice has been given under this Subsection, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.
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