The House of Representatives is reportedly taking action against the independence of the Central Bank of Nigeria (CBN) by threatening to arrest its Governor, Mr. Godwin Emefiele, over his refusal to change the January 31 deadline for phasing out old banknotes. Despite the CBN’s independence as outlined in the CBN Act 2007, which states the bank must “be an independent body in the discharge of its functions” in order to achieve its mandate and promote economic stability.
Speaker of the House of Representatives, Hon. Femi Gbajabiamila has reportedly threatened to invoke legal measures to arrest the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, and bank CEOs for refusing to appear before an ad hoc committee investigating the naira redesign project and the January 31 deadline for phasing out old banknotes. This move is in clear violation of the provisions of the CBN Act 2007, which grants the bank operational and monetary policy independence. Gbajabiamila claims that allowing old banknotes to remain in circulation alongside the new ones would not harm the economy and would protect the people from financial hardship. He has threatened to contact the Inspector General of Police to issue arrest warrants next Tuesday and vowed that the House of Representatives would ensure that the provisions of the law are followed in full, despite the CBN’s imposed deadline.
Speaker of the House of Representatives, Hon. Femi Gbajabiamila announced that CBN Governor Godwin Emefiele did not appear before the committee yesterday due to a trip to Dakar, Senegal with President Muhammadu Buhari. Instead of adjourning the plenary till February 28 as previously planned, Gbajabiamila said the lawmakers would reconvene next Tuesday to take action against Emefiele if he fails to show up. Gbajabiamila stated that the CBN’s refusal to attend the meeting is a disregard for the well-being of the Nigerian people and an insult to the authority and prerogatives of the parliament.
He also stated that he will use the authority conferred by Section 89 (1)(d) of the Constitution of the Federal Republic of Nigeria and Order 19 (2)(1) of the Standing Orders of the House of Representatives to issue a warrant to the Inspector General of the Nigeria Police Force to compel the attendance of the CBN or managing directors who fail, refuse or neglect to respond to the summons by the House of Representatives. Gbajabiamila acknowledged that the CBN has the authority to determine the country’s legal tender and to recall currency with reasonable notice, subject to the approval of the president, but also stated that the House is aware that Section 20 (3) of the CBN Act mandates the central bank to redeem the face value of the recalled currency upon demand, even after the expiration of the notice of recall.
“It appears that there is a growing conflict regarding the independence of the Central Bank of Nigeria (CBN) and its decision to phase out old banknotes. The Speaker of the House of Representatives, Hon. Femi Gbajabiamila has threatened to arrest the CBN Governor, Mr. Godwin Emefiele, if he does not appear before an ad hoc committee set up to question the central bank about the naira redesign project and the January 31 deadline. Gbajabiamila argues that the CBN’s decision will negatively impact the economy and citizens and that the bank should allow the old notes to remain in circulation. However, the CBN’s independence is protected by law and it has the authority to determine legal tender and recall currency with reasonable notice. Commercial banks have also stated that they are bound by the CBN’s guidelines and that the January 31 deadline is still in place.”
Representatives from various commercial banks informed the House of Representatives that they are bound by the guidelines of the Central Bank of Nigeria (CBN), as their regulator in the implementation of the cash swap policy. The banks, who were meeting with an ad hoc committee of the House of Representatives, said that they received allocations of new naira notes from the CBN and dispensed them through Automated Teller Machines (ATMs). The banks stated that the January 31 deadline set by the CBN is still in effect and they are doing their best to comply with it. They also explained that due to the cashless policy, they were not able to collect as much money as was deposited with the CBN and urged the public to understand the importance of the cashless policy. The banks also stated that new notes can only be accessed through ATMs and not across bank counters.
Oniko Daniel, the Regional Executive for Heritage Bank, emphasized the importance of understanding the need for the cashless policy during a meeting with the House of Representatives ad hoc committee. He stated that the Central Bank of Nigeria (CBN) is implementing a cash swap policy and that the public needs to be aware of the guidelines set by the CBN, which commercial banks are bound to follow. Shehu Aliyu, the representative of First Bank, added that the bank has seen an increase in people opening accounts and depositing money and that they have been doing their best to handle the demand for new notes across the country.
Hassan Umar of Fidelity Bank stated that the bank receives about 60% of the new notes they deposited with the central bank. The chairman of the ad hoc committee, Hon. Alhassan Ado-Doguwa alleged that there is a hidden agenda behind the redesign of the naira and that the committee will recommend that the Speaker issues a warrant of arrest for the CBN Governor, Godwin Emefiele. He added that the banks need to question the CBN on their guidelines that affect the customers and that the economy is suffering as the country is heading toward an election. He also believes that there is a hidden force behind the agenda and the committee will not allow it to continue to negatively impact the success of the electoral process.
Source: ThisDay Live