In Battle against Independent Monetary Policy, Nigeria’s House Threatens to Arrest CBN Governor

There appears to be a raging battle against the independence of the Central Bank of Nigeria (CBN), with the House of Representatives threatening to arrest the CBN Governor, Mr. Godwin Emefiele, over his insistence that the January 31 deadline for phasing out the old N200, N500 and N1,000 banknotes will not be altered.

The CBN has operational and monetary policy independence.
In fact, Section 1 (3) of the CBN Act 2007 states, “in order to facilitate the achievement of its mandate under this Act and the Banks and Other Financial Act, and in line with the objective of promoting stability and continuity in economic management, the Bank shall be an independent body in the discharge of its functions.”

But apparently going against the provisions of the law and in clear pursuit of personal interest, Speaker of the House of Representatives, Hon. Femi Gbajabiamila, on Thursday, threatened to invoke relevant sections of the law to issue a warrant of arrest on Emefiele and bank chief executive officers (CEOs) should they refuse to appear before its ad hoc committee that was set up to interrogate the central bank and the CEOs on the naira redesign project and the January 31 deadline.

Gbajabiamila insisted that CBN must heed the call of Nigerians and allow the old banknotes to remain in use alongside the newly redesigned currencies so as not to jeopardise the economy and impoverish the people.

Threatening that he would contact the Inspector General of Police to issue the arrest warrant next Tuesday, Gbajabiamila noted that the CBN Act mandated the bank to redeem the face value of the recalled currency upon demand, even after the expiration of the notice of recall. He vowed that notwithstanding the deadline imposed by CBN, the House would see to it that the provisions of the law were followed in full.
Informing lawmakers why the CBN governor did not appear before the committee on Thursday, Gbajabiamila said he was in possession of a letter from the apex bank that Emefiele had travelled on a trip with President Muhammadu Buhari to Dakar, Senegal, and would not be available for the meeting.

Gbajabiamila added that instead of the House adjourning plenary till February 28, for the elections, as previously planned, the lawmakers would reconvene next Tuesday to take an action against Emefiele if he failed to show up.

The speaker said, “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, pursuant to 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 of the Nigeria Police Force 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.

“The House of Representatives recognises the CBN’s 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 central 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.”
Meanwhile, some commercial banks, on Thursday, told the House of Representatives that they were bound by the guidelines of the CBN, as their regulator in the implementation of the cash swap policy.

The banks, in a meeting with the ad hoc committee of the House of Representatives set up to interface with them on the withdrawal of old notes, also said they got allocations of the new naira notes from the CBN and dispensed same to their customers through their Automated Teller Machines (ATMs).

The banks, represented by their various staff, took turns to respond to the issues, saying the January 31 deadline of the CBN is still sacrosanct. They said due to the cashless policy, they were not expected to collect as much money as deposited with the CBN, stressing that the public should first understand the importance of the cashless policy.

The banks revealed that, presently, the new naira notes could only be accessed through the ATMs and not across banks’ counters.
The representative of Access Bank, Hadiza Ambuza, said, “We are collecting the money and loading them into the ATMs, as quickly as we get them. We are doing the best we can up until the deadline.”

Similarly, the representative of Lotus Bank, Mohammed Abdul, said, “On the issue, we have been receiving the new notes and returning the old notes. However, in the last few weeks, it’s been insufficient. We receive an average of N40 million weekly for our banks in Abuja”.
For Sterling Bank, its representative, Orlando Umoren, said, “Looking at the issue on the ground, the CBN presents allocations to banks, whether or not this allocation is sufficient is a different ball game. As I speak with you, all our ATMs are dispensing.

“Allocations are shared. What we receive fluctuates. We receive a minimum of N150 million to be shared. In Kaduna, N150 million, in Kano, we received N100 million to be shared amongst the branches in the metropolis. They are being fed in the ATMs only and not to be given to the customers across the counter.

“In Abuja here, what we are given is about 80 per cent.”
Ecobank’s representative, Rita Etomi-Ademola, said, “What I can say is that the 255 branches we have, have been collecting the notes and feeding the ATMs. I may not have the details here because I don’t want to give wrong figures.”

The representative of the United Bank for Africa Plc said, “What we are doing right now is to load all the new notes. As regards the allocation, the figure is about 70 per cent and I can assure that we collect money from the CBN every day. As we collect, we load it. We collect the old notes and send to CBN. That is still ongoing.”

Regional Executive for Heritage Bank, Oniko Daniel, urged members of the public to understand the need for the cashless policy.
Daniel told the House ad hoc committee, “If you load a cartridge, which is about N8 million, in less than two hours that N8 million is finished. It must be understood. People want to deposit N10 million and want to collect N10 million, it is not possible.
“The CBN is doing cash swap. The public needs to know the guidelines and what the CBN is saying. CBN guideline is more or less a rule to the commercial banks.”

For First Bank, its representative, Shehu Aliyu, said, “We have seen an upsurge of people coming to open accounts and deposit money into those accounts. We have been handling this as much as we can. After this hearing, we will bring details. We have been paying out new notes across the country.”

Hassan Umar of Fidelity Bank said, “We do receive about 60 per cent of what we deposited with the central bank in terms of the new notes.”
In his remarks, chairman of the ad hoc committee, Hon. Alhassan Ado-Doguwa, alleged that a dark horse was behind the agenda to redesign naira, stressing that the committee would recommend that the Speaker invokes the relevant sections of the law to issue a warrant of arrest on the CBN Governor, Godwin Emefiele.

Ado-Doguwa added that the banks needed to interrogate the CBN on some of their guidelines that affect the customers.
He said, “I want to rule that the CBN, through its chief executive, who is the governor, has decided to flagrantly disregard and disrespect the institution of the legislature. And on this note, I would want to say that this committee will out rightly inform the House.

“Commercial banks are complaining, their customers are complaining, the economy is bleeding, and we go to the polls in these circumstances.

“I want to believe that somewhere, somehow, there is a dark horse behind the agenda and we will not allow that to continue to drag the success of our electoral process.”

Udora Orizu in Abuja, James Sowole in Abeokuta and Fidelis David in Akure

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