Naira Redesign: Finance Minister warns CBN of consequences, disowns policy

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed on Friday faulted the naira redesigning program of the Central Bank of Nigeria warning the timing for the implementation of the policy is wrong.

Zainab Ahmed said that she had no knowledge of the policy until it was announced two days ago by the CBN Governor, Mr Godwin Emefiele.

According to her it would have a negative impact on the foreign exchange market.

The Minister, who commented on the policy in response to question raised by Senator Opeyemi Bamidele (APC Ekiti Central) during 2023 budget defence session with the Senate Committee on Finance, warned CBN of consequences that may arise from it.

Senator Bamidele had in his question, told the Finance Minister that barely two days after announcement of the policy by CBN, repercussion of it on the value of Naira to US dollar was being felt.

“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 stashed 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,” she said.

Surprisingly, the Minister in her response said she and her Minister of State were not aware of the policy but only heard of it from the media.

“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.”

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“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.

Effective January 31, 2023, the existing N100, N200, N500, and N1,000 banknotes will cease to be accepted as a medium of exchange for any transaction conducted in Nigeria, the Central Bank of Nigeria had said.

The CBN Governor, Godwin Emefiele had said the apex bank, in line with global best practices had received the approval of President Muhammadu Buhari to redesign the bank notes new with new features.

He said when effective from December 15 this year, Nigerians who are in possession of the old notes should approach their banks for the new notes.

The Federal Ministry of Finance, Budget and National Planning said the ministry was not consulted on the new monetary policy announced by the CBN to redesign N200, N500 and N1000 naira notes with effect from Dec 15.

Minister of Finance, Mrs Zainab Ahmed, said this in Abuja on Friday, while responding to questions from Sen. Bamidele Opeyemi (APC-Ekiti) on the impact of the policy at the budget defence session with Senate Committee on Finance.

Opeyemi had  decried the spontaneous increase in price of dollar to naira at the parallel market since the policy was announced by the CBN.

He expressed concern on the likely consequences of the policy on the nation’s economy, given the astronomical increase of forex.

Collaborating, Chairman of the Committee, Sen. Solomon Adeola (APC-Lagos), said with the announcement of the policy, dollar had started going up.

He said the consequences of the policy were that price of dollar to the naira was rising, adding that it might rise to N1,000 before December, when the policy would take off.

The minister said she received information on the new policy just as other Nigerians, saying that her ministry, as a fiscal authority, was not part of the process leading to formulation and announcement of the policy.

“We were not consulted, it was an announcement that we heard, it was said that part of the reason advocated was that it was one of the ways to mope up liquidity to manage inflation.”

“But there are consequences that we are also looking at, what will the consequences be, there will be some benefits, but there will be some challenges.”

“And I don’t know whether the monetary authorities have actually looked very closely as to where the consequences are and how they can be mitigated.”

“So I still advise that you have that discussion with the monetary authorities,” she said.

She said it was her opinion, as a Nigerian, not as a fiscal authority, reiterating that as finance ministry and fiscal authority, they were unaware of the policy.

On debt profile of the nation, she said the size of the nation’s debt profile which stood at 23 per cent to the Gross Domestic Product (GDP), was a healthy debt.

She revealed that the debt services were sustainable, adding that what the nation needed was to increase its revenue generation profile.

She said the Nigeria Customs Service (NCS) collections stood at 83 per cent performance of the 2022 budget as at August.

She said with the activation of the excise duties on carbonated drinks and eventual commencement of the use of heavy duty scanners by customs at the ports, revenue profile would increase towards the end of the year. (NAN)