The face-off between Finance Minister Zainab Ahmed and the Central Bank of Nigeria Gov. Godwin Emefiele over the redesigning of Naira notes may have been put paid to as President Muhammadu Buhari confirmed he gave his approval for the project.
Persecondnews had reported that Ahmed disowned the CBN policy, saying her ministry was not consulted in the new Naira note redesigning.
She warned of the “dire consequences” of the policy on the value of the Naira.
But President Buhari in a statement by his Senior Special Assistant on Media and Publicity, Malam Garba Shehu, dismissed the minister’s position on the matter, saying he gave his approval for the Naira redesigning.
He said he “is convinced the nation will gain a lot from the changes being made to the nation’s currency.
Speaking in a Hausa radio interview with Halilu Ahmed Getso and Kamaluddeen Sani Shawai, Buhari said reasons given by the CBN convinced him that the economy stands to benefit from a reduction in inflation, currency counterfeiting and the excess cash in circulation.
According to him, the period of three months for the changes to the new notes is not short.
“People with illicit money buried under the soil will have a challenge with this, but, workers, businesses with legitimate incomes will face no difficulties at all,” he said.
Emefiele had through the spokesman for the CBN, Mr Osita Nwanisobi, expressed surprise at the minister’s claim, insisting that the CBN remains a “very thorough institution that follows due process in its policy actions.”
The apex bank, however, allayed concerns about the cost of printing the new notes, saying “it will come at no outrageous cost, printed in the country and within the budget of the apex bank.”
Nwanisobi stressed that the “CBN remains a very thorough institution that follows due process in its policy actions.”
According to Nwanisobi, the management of the CBN, in line with provisions of Section 2(b), Section 18(a), and Section 19(a)(b) of the CBN Act 2007, had duly sought and obtained the approval of President Muhammadu Buhari in writing to redesign, produce, release and circulate new series of N200, N500, and N1,000 banknotes.
Urging support the currency redesign, he said it was in the overall interest of Nigerians as some people were hoarding significant sums of banknotes outside the vaults of commercial banks across the country.
Nwanisobi said this act should not be encouraged by anyone who meant well for the country.
Meanwhile, economists and financial experts have called for harmony between the fiscal and monetary policy authorities without jeopardizing the independence of the CBN.
Mr David Adonri, the Vice-Chairman, Highcap Securities, said the CBN as an independent body as operational in other economies does not require the permission of the President for a project such as the redesigning of the Naira.
“The economy is managed by the government through macro-economic policies (fiscal and monetary policies); while the Federal Ministry of Finance (FMoF) is the fiscal authority, CBN is the monetary authority.
“They are expected to work harmoniously in policy formulation and implementation. Any discord between these authorities is detrimental to economic management.
“Before any policy is formulated by any of them, there ought to be in-depth consultation between them and thorough analyses to know the sensitivity on either side of the economy.
“Although each authority has its areas of exclusivity, which it may exercise without recourse, carrying each other along will facilitate superior policy outcomes.
“In this particular instance, the reasons for changing of currency by CBN are justifiable but there is no reason for not carrying the FMoF along for them to be prepared for the change.
“Where the monetary authority is independent which we clamour for, the Central Bank does not even require permission from the President to undertake any monetary action.
“Independence of a central bank is essential so that monetary policy will not be influenced by political expediency,” Adonri said.