Finance Minister Faults CBN On Planned Currency Alteration

…asks Senate to probe proposal

Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmad, has reportedly disowned the new Central Bank of Nigeria (CBN) policy on redesigning the Nigerian currency, the naira.

The Minister made this disclaimer when she was to a question raised by Senator Opeyemi Bamidele representing Ekiti Central, during the 2023 budget defence session with the Senate Committee on Finance.

Reports reaching have it that the Finance Minister warned the CBN of the dire consequences that may arise from its new policy.

The Senator asked: “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.”

The Minister, to the surprise of the Senators, noted that she was hearing it from the media for the very first time, as she had no prior idea of what was happening in that regard.

According to her: “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.

“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.”

Recall that the CBN Governor, Godwin Emefiele, had on Wednesday, informed Nigerians that the apex bank was planning to redesign the country’s currency from 200 Naira denomination to N1,000 notes.

His reason was that this new development will allow the CBN take control of the currency in circulation just since the bulk of the nation’s currency notes were outside bank vaults.

Emefiele noted that the management of the CBN had sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate the new series of banknotes at N200, N500, and N1,000 levels.

While also responding to Senator Adamu Aliero’s question, on the need to take bold and decisive action on oil subsidy removal since, in actual sense, most Nigerians don’t buy the product at official price, the Minister said she is an advocate of subsidy removal.

She noted, however, that “you know in government, there are several layers of decision making. As Ministry of Finance we review the fiscal policy and make recommendations and recommendations are reviewed by the Federal Executive Council (FEC) and then the MTEF and the budget  reviewed and approved by FEC then they come to the legislature for implementation.

“When we did our initial review for the MTEF for full year was N6.7 trillion. We recommended for half year, which is N3.3 trillion. When discussion at the parliament was going on, we suggested let us reduce that half year by half, but it didn’t pass. 

“If it is up to us in the Ministry of Finance we should have removed subsidy a long time ago. We even tried in 2020; it was removed but there was a reversal. In 2021 we made provision to exit half year, it was also reversed and even caused an amendment of the Appropriation Act.

“It is a collective decision and what we are glad about now is that Nigerians themselves are the ones asking for the removal because people now understand what we have been saying that the benefits that we think the oil subsidy is serving for the people is not actually benefiting the people.

“It is not the people that need the subsidy that are enjoying the subsidy. And the cost is too high, this time we cannot afford it.”

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