The Legal Rights Or Powers Of The Central Bank Of Nigeria To Redesign The National Currency
It was announced by the Governor of the Central Bank of Nigeria, Godwin Ifeanyi Emefiele on October 26, 2022, that new Naira notes would be introduced to replace the current 200, 500, and 1000 Naira notes. The Central Bank’s Governor further stated that the redesign would take effect from Thursday, 15th December, 2022. However, several questions have been brought up as to the legality or otherwise of the Central Bank of Nigeria to redesign the naira notes.
This article is written to shed more light on the issue as regards the power vested in the Central Bank of Nigeria to redesign Naira notes. Going back in history, Nigeria has altered its currency four times in the last 15 years. In 2009, the 5-naira, 10-naira and 50-naira notes were converted from paper notes to polymer substrate following the success of the 20-naira polymer banknote issued in 2007 to improve the durability of the currency. In 2010, the 50-naira commemorative polymer banknote was issued to celebrate Nigeria’s 50th independence. The last redesign was in 2014 when the 100-naira commemorative banknote was issued in celebration of Nigeria’s centenary celebration. Besides the durability and celebratory qualities of the redesign, any notable economic or security advantages remain largely unknown and unattained. For instance, in some parts of the nation, the old 100-naira note is still used in transactions and exists alongside the centenary note eight years later.
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The power and legal right to change or redesign any Naira notes is vested solely on the Central Bank of Nigeria upon approval by the President. This issue has been settled like sand in a cup of water by the provision of Section 18, 19 and 20 of the Central Bank of Nigeria (CBN) Act 2007.
Section 18 (a) and (b) of the CBN Act goes thus:
The Bank shall:-
- (a) Arrange for the printing of currency notes and the minting of coins; Issue, re-issue and exchange currency notes and coins at the Bank’s offices and at such agencies as it may, film time to time, establish or appoint.
It is clear like a crystal stone from the above cited provision of the CBN Act that:
- (a) The power to print or mint naira currency is solely the responsibility of the Central Bank of Nigeria.
- (b) The CBN is also of the responsibility to issue, re-issue and exchange Naira notes.
Furthermore, Section 19 subsection 1(a) and (b) buttress the point when making provision that:
19(1) The currency notes and coins issued by the Bank shall be –
- (a) In such denominations of the Naira or fractions there of as shall be appointed by the President on the recommendation of the Board; and
(b) Of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board.
There is no need for the use of a binocular lens to infer from the above provision that the designing and printing of the Naira notes is the sole duty of the Central Bank.
Section 2(b) of the CBN Act, 2007 mandates the Central Bank of Nigeria to be the sole issuer of legal tender, Nigeria currency in Nigeria. The Central Bank of Nigeria regulates the volume of money supply in the economy in order to ensure monetary and price stability.
All the above sections are to the effect that; it is only the Central bank of Nigeria that wield the sole power to print and redesign Naira note as Nigeria is concerned.
A careful perusal to Section 16 of the Constitutionl4 is to the effect that government should provide economic liberty to the citizen of the federal republic of Nigeria. This can only be achieved if there is enough cash for people to spend to ease their burden. Although, Chapter 2 of the Constitution of Federal Republic of Nigeria, 1999(as amended) is not actionable that is, government cannot be sued over non implementation of this chapter. However, for the betterment and progress of the country’s economy, the Central Bank of Nigeria should not be deprived of their sole right to redesign and print Naira notes. It is pertinent to be aware that since another Act has entrenched the replica of this chapter, it is enforceable. Provison in cbn act o economy
4 Section 16 of the Constitution of the Federal Republic of Nigeria 1999 (as altered)
Furthermore, Item 7 and 15 of the Second Schedule, part 1 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) make provision to the effect that Currency, coinage and legal tender should be solely the responsibility of the National Assembly and should only be the responsibility of a body which is established by an act of the National
Assembly which the Central Bank of Nigeria Act 2007 is of no exception. This section make it a sole responsibility of the exclusive legislative list to make laws on issues like this.
Conclusively, It is no doubt that the legal right and power the Central Bank of Nigeria to print and redesign naira notes is constitutional and it is the sole responsibility of the Central Bank of Nigeria which should not be disturbed or checked by any other organ of the government.
NAME: TOHEEB ABDULSAMOD OBASANJO
UNIVERSITY: UNIVERSITY OF ILORIN
LEVEL: 200 LEVEL.