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The CBN Act Doesn’t Support a Confiscation of our Old Currency

SILIVALLY / / The CBN Act Doesn’t Support a Confiscation of our Old Currency (14 Views)

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The CBN Act Doesn’t Support a Confiscation of our Old Currency by : 12:48 pm On February 23, 2023
Fashola appeared on AriseTV this morning to clarify his comments on the CBN’s naira redesign policy. He said that the CBN Act doesn’t support a confiscation of our old currency but a 1:1 swap of old and new currency. He also accused AriseTV of being biased in their coverage.

Fashola: What has happened in the purported exercise of the Central Bank Act, especially section 20 where it talks about redesigning currencies, it gives powers undoubtedly to Central Bank to undertake that exercise. My understanding of that provision, because I’ve read it again and again, and what it suggests to me, my interpretation of that section of the law, is that if you choose to redesign a denomination A, say the 100, the 500, or the 200, every time I produce a 200 you must give me a 200. Every time I produce a 1000 you must give me a 1000 back, until that currency denomination is eventually taken out of circulation. {Cash swap is} the word used in the act. So what has been done here has no legal basis. That is my view.

On a cold and calm interpretation, if the law says that you can only take two steps, if you take 4 steps, you have violated the law. Once you’re a creature of law. So as I said, let me be clear again, the central bank clearly has powers under section 23 to redesign currency, but that process is a swapNot to say bring all your money. The law didn’t envisage that at all. And to that extent, it is outside the law.

So when I sit down and listen on TV, some people say it is causing pain – understandably, we are all united about the pain and discomfort it is causing – but some people, some media houses seem to have a vested interest in supporting that exercise. I’m wondering what their investment even in their partisanship may be, in an investment in illegality.

The question we should even be asking ourselves is :- the authorization to redesign and swap, approved my Mr President, does it include an authorization to mop up money? Does the Central Bank Act [support it?] Because it’s one thing to have an authorization on the fact of the letter of the law and then proceed to do something that is contrarian to law, which is what seems to have happened in my own view.

We will wait for the Supreme Court to determine [how the situation should be resolved]


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