New naira: Reps to issue warrant of arrest on Emefiele
The House of Representatives on Wednesday threatened to issue a warrant of arrest on Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN), and chief executive officers (CEOs) of commercial banks should they refuse to appear before its ad-hoc committee over the withdrawal of old naira notes.
Femi Gbajabiamila, the speaker of the House, issued the threat after reading a letter sent by Edward Adamu, the CBN deputy governor (corporate services), which said the CBN governor was on President Buhari’s delegation to Dakar, Senegal, and could not appear before the Alhassan Ado-Doguwa-led ad-hoc committee.
The House had on Tuesday constituted the ad-hoc committee to meet with both the apex bank and commercial banks over the scarcity of the redesigned N1000, N500 and N200 notes and review of the January 31 deadline for the easing of the old currency.
Gbajabiamila expressed displeasure over the impact of the new cash policy on the economy and well-being of the citizens, insisting the deadline must be reviewed.
He said: “The House of Representatives, in response to a motion on a matter of urgent public importance, invited the CBN and managing directors of banks in Nigeria to appear before the House of representatives.
“They were invited to give reasons for the ongoing failure to adequately disburse the redesigned naira notes before the expiration of the deadline of January 31, 2023, when the old notes will cease to be legal tender.
“The House further constituted an ad-hoc committee led by the majority leader, Alhassan Ado Doguwa, for this purpose. No official of the CBN appeared to respond to the summons by the House of Representatives. This is unacceptable.
“The resolution of the House was predicated on information showing that the rollout of the redesigned naira notes has been an unmitigated failure. This failure has real and dire consequences on the ability of Nigerians to conduct business across the country.
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“The refusal by the CBN to heed the invitation by the House of Representatives is evidence of a blatant disregard for the well-being of the Nigerian people who are their customers. It is also an insult to the authority and prerogatives of the people’s parliament.
“Therefore, I will, under 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, not hesitate to issue a warrant to the inspector general 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 added that: “the House of Representatives recognises the CBN authority to determine the country’s legal tender and to recall currency with reasonable notice, subject to the approval of the president.
“The House is also aware that Section 20 (3) of the CBN Act mandates the apex bank to redeem the face value of the recalled currency upon demand, even after the expiration of the notice of recall.
“Notwithstanding the deadline imposed by the CBN, this House will see to it that this provision of the law is honoured in full.
“Now let me explain that again: the CBN Act, under Section 20, allows the bank to change the legal tender. It also says that after the expiration date, such naira notes changed will no longer be legal tender, but it also says that even five months, three months, or two months after, even in June, all the old notes presented to the bank shall be redeemed by the bank.
“That point needs to be made to the central bank and the public. It has not been made. It is a provision of law. Gentlemen, if you recollect in 2009 and 2010, the then governor of the central bank, Charles Soludo, introduced polymer notes and wanted to phase out N5, N10, N20 and N50 notes.
“There was public outcry because of the time. At the end of the day, it was halted. What did he do? He did what all known central banks do all over the world; he allowed for those N50 notes to continue in existence while introducing new notes until everything was mopped up by the banks.
“So, they were operating side by side for the good of the people. And this is all that this House is asking, either an extension or pari pasu.
“So, Section 20(3) of the central bank Act is perhaps what is most important right now; that after the deadline, the old notes will no longer be legal tender…in other words, I cannot go to a supermarket, buy goods and bring out my old notes.
“Even if the waiter decides to accept any old note, even the ones in the supermarket, if they decide a month later to take that money to the bank, the bank is under statutory obligation to accept it and redeem it at face value. That is the position of the law as passed by the National Assembly.”
On the other hand, deposit banks who appeared before the committee said they were only allowed by CBN directive to distribute the redesigned notes through Automated Teller Machines (ATMs), and not across the counter withdrawals.
The banks also told the committee that only a fraction of the value of the old notes they collect and deposited with the CBN was given to them in the new notes.
Mohammed Abdul of Lotus Bank said the institution has been receiving the new notes but in the last few weeks they were insufficient.
“We’re getting an average of N40 million weekly, and that is insufficient, while a representative of the Guarantee Trust Bank, disclosed that in its Abuja operational area, the bank got about 60 percent of its deposit, noting that the figures vary from city to city.
Femi Bamigboye of SunTrust Bank, said the bank gets an average of N100 million worth of the new notes weekly, which represents about 80 percent of what it deposited, while Shehu Aliyu of First Bank was not handy with the figures, and was given 24 hours to furnish the committee secretariat with the details.
Other banks represented at the meeting were Ecobank, Wema, Fidelity, Heritage, Unity Bank, UBA, Sterling Bank and Jaiz Bank.