December 29, 2022
The Nigerian Senate on Wednesday resolved that the Central Bank of Nigeria (CBN) should extend the deadline for the phase out of some naira notes till June 30, 2023.
Following the redesign of the 1,000; 500 and 200 denominations of the naira, the CBN set a January 31 deadline to withdraw the old notes from circulation.
The policy has since generated controversy with many stakeholders berating the decision as politically-motivated and unrealistic. National elections, often heavily cash-induced, are due by February 25, according to electoral body INEC.
The CBN has maintained that its cash limit policy were devoid of political interference and was meant to salvage the country’s economy from persons who have hoarded over 80 per cent of the currency out of bank vaults, apparently for criminal enterprises.
Citing Orders 45 and 51 of the Senate Rule, Senator Ali Ndume (APC-Borno) moved a motion to extend the circulation of the old notes. The motion was seconded by Senator Adamu Aliero (APC-Kebbi).
Mr Ndume argued that the time for the withdrawal of old notes from circulation was too short, especially for his constituents in southern Borno, where years of insurgency has limited the availability of banks.
The Senate therefore urged the apex bank to extend the date for the implementation of its new cash policy.
The World Bank had last week expressed concerns over the impact the naira redesign would have on the livelihood of Nigerians, stating the timing and short transition period may pose adverse effects on the country’s economic activity.
“At present, households and firms already face elevated financial pressures from prolonged, high inflation, recently compounded by external food and fuel price shocks, and the severe floods, and phasing out existing naira notes over a short time period may add to their challenges,” the global financial institution said.