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The decision of the Central Bank of Nigeria (CBN) to redesign N200, N500 and N1,000 naira has got legislative backing from the Nigerian Senate.

The upper legislative arm of the National Assembly approved a motion supporting the redesign of the naira notes after a rowdy session.

Senator Uba Sani moved the motion with the title: “Re-design of the New Naira Notes by the CBN: A Call for Legislative Support.”

The motion read: “Notes that currency management is a key function of the Central Bank of Nigeria and the integrity of the Naira and efficient supply of banknotes are indicators of a performing central bank, especially in predominantly cash-based economies such as Nigeria;

“Notes also that in recent times, currency management in Nigeria has faced series of challenges that have affected the ability of the CBN to efficiently carry out its mandate of issuing legal tender (i.e., provision of an adequate volume of clean banknotes in the right denominational mix for members of the public)

“Concerned that these challenges will continue to grow in scale, with attendant consequences on CBN and Nigeria’s reputation, if left unaddressed;

“Aware that these challenges are primarily centered around the wholesale hoarding of Naira banknotes by members of the public. Available statistics show that cash outside banks consist of over 80 per cent of Currency-In -Circulation (CIC).”

The motion succeeded by a majority of bipartisan support amidst concern that the Jan 31, 2023 deadline given by the central bank to totally implement the redesign is insufficient.

The motion was debated mainly on the argument that the deadline should be shifted by three more months. Senator Orji Uzor Kalu, with the support of senators Ali Ndume, Abiodun Olujimi, Betty Apiafi, Barau Jibrin, Chukwuka Utazi, argued that although the CBN policy is good, the deadline should be extended to enable effective compliance.

According to Kalu, the CBN governor Godwin Emefiele should be invited by the Senate Committee on Banking and Finance and be persuaded to move the deadline to April 30, 2023.

However, the senators’ push for the CBN to move the deadline is understood to be a ploy to help politicians offload the huge cash they have stockpiled for the elections. With the elections scheduled to hold in the early months of 2023, the central bank’s directive that old naira notes should be deposited to banks by the end of January, will greatly scuttle politicians’ chances to influence the outcome of the elections with vote-buying.

But senator Sani urged the red chamber to support the CBN naira redesign policy including the deadline. President Muhammadu Buhari had said that the CBN’s decision to redesign the naira notes, which is scheduled to take effect from Dec 15, has his backing.

The CBN said as at the end of September 2022, N2.73 Trillion out of the N3.23 trillion currency in circulation, was outside the vaults of commercial banks across the country, and supposedly held by the public. Thus, the apex bank’s decision to redesign the naira notes is aimed at curtailing the amount of cash stashed outside banks’ vaults. This, as believed by many, will help tame inflation.

With a divided house, the concern that rural areas would not be able to meet the CBN’s Jan 31, 2023 deadline, due to underbanking, became another concern for the Senate.

Senator Ali Ndume had earlier noted that there were only five banks in the entire 27 local government areas in Borno State since the insurgency started in the state, amplifying the concern that in some states across the country, Nigerians who lack access to financial inclusion will be seriously impacted by the naira notes redesign. Most banks in the rural communities have been shut down due to insecurity.

Although the senate indulged in heated debate over the matters arising, particularly the deadline issued by the CBN, it later resolved to support the naira notes redesign with legislation.

Deputy President of the Senate, Senator Ovie Omo-Agege, who presided over the session, said it was the prerogatives of the CBN to redesign the naira and put a deadline for compliance.

However, the Senate agreed that Emefiele has more clarification to make on the issue as regards its impact on national interests.

There is belief that the naira redesign will help in the fight against insecurity. But Senator Betty Apiafi noted that terrorists have opted to collect ransom in foreign currency, following the CBN’s decision to redesign the naira notes.