INTRODUCTION

Over the years, the Nigerian legal tender has been redesigned four (4) times; the first time

was in 1965 when Nigeria became a republic, and the main reason why it was redesigned was

so that it could reflect that it was now being issued by the Federal Republic of Nigeria. The

Nigerian currency was redesigned yet again in 1968, following a civil war. Nigeria chose to

modify the currency notes it printed in 1965 as a war tactic to counteract the misuse of the

country's currency notes during the period. Nigeria implemented a genuine monetary system

in decimal form in 1973, replacing the imperial system inherited from the British colonial

administration, which resulted in a currency redesign then, as part of the economic reforms

implemented in 2007, new banknotes with new designs were reissued.

BRIEF HISTORY OF CENTRAL BANK

Research establishes that, an enquiry by the then colonial administration to probe banking

practice in Nigeria made them appoint G.D Paton to probe on the Nigerian banking

ambience, all in a bid to know the conditions for healthy banking operation.Consquent upon

this,GD Patent report was birthed, and it equally serves as the basis for the 1st Banking

Ordinance of 1952;which was designed to ensure orderly commercial banking to avert the

establishment of nonviable bank.Subsequently,a draft legislation for the establishment of

Central Bank of Nigeria was presented to the House of Representatives in March 1958 and

the Act was fully enacted on the 1st of July,1959, which serves as incipient stage of CBN in

Nigeria.

The Federal Republic of Nigeria's Central Bank of Nigeria Act of 2007 stipulates that the

Bank shall oversee and administer all monetary and financial sector policies on behalf of the

Federal Government. Section 2 of the act provides that –

The Principal objects of the Bank shall be to-

Objects of the Bank.

(a) ensure monetary and price stability;

(b) issue legal tender currency in Nigeria;

(c) maintain external reserves to safeguard the international value of the legal tender

currency;

(d) promote a sound financial system in Nigeria; and

(e) act as a banker and provide economic and financial advice to the Federal Government.

Section18 (a) & (b) and Section 20(3) of the Act empower the Central Bank of Nigeria to

print, redesign, destroy, and re-distribute currencies-

The Bank shall-

(a) arrange for the printing of currency notes and the minting of coins;

Power to print notes

and mine coins.

(b) the issue, re-issue, and exchange currency notes and coins at the Bank's offices and at

such agencies as it may, from time to time, establish or appoint;

(c) arrange for the safe custody of un-issued stocks of currency notes and for the preparation,

safe custody, and destruction of plates and paper for the printing of currency notes and disc

for the minting of coins; and

(d) arrange for the destruction of currency notes and coins withdrawn from circulation under

the provisions of section 20 (3) of this Act or otherwise found by the Bank to be unfit for use.

THE LEGAL RIGHTS OF THE CENTRAL BANK TO REDESIGN NATIONAL

CURRENCY.

This has to do with the legal rights conferred on CBN to redesign the national currency.

Therefore, the community reading of Section 18(a), 18(b) and 20(3) of the CBN Act 2007

will portrays a better justification to that effect. Be that as it may, Section 18 (a), and (b),

establishes that: CBN shall “arrange for the printing of currency notes and the minting of

coins; as well as issue, re-issue and exchange currency notes and coins at the Bank’s offices

and at such agencies as it may, from time to time, establish or appoint”. Simply put, the CBN

shall organize for printing of currency note, coins minting, and equally giving them out as

and when due. Then, section 20(3) of the same Act establishes that: ‘notwithstanding sub-

sections (1) and (2) of this section, the Bank shall have power, if directed to do so by the

President and after giving reasonable notice on that behalf, to call in any of its notes or coins

on payment of the face value there and any note or coin with respect to which a notice has

been given under this subsection, shall, on the expiration of the notice, cease to be legal

tender.” Succinctly put, section 20(3), endorsed the CBN to redesign currency, if authorized

by the president to embark on it, in line with his cogent notice on such. As seen in the

foregoing, the only requirement for reissuing/redesign currency is that the CBN intends to do

so, arranges for the processes, and gives reasonable notice of its intention to do so.

While there are multiple opinions about the redesigning of the naira notes, this writer is of the

opinion that the redesigning will help curb the hoarding of currency by Nigerians- It is no

news that corruption thrives in Nigeria, and many corrupt persons keep large sums of money

in soak-aways or overhead tanks and even unoccupied houses, These monies have been
alleged to be stolen public funds. Instances of such corrupt practices abound, and recent

examples are the Ikoyi gate scenario, the Kaduna gate scenario, and the Benue example,

where monies were stashed in bags discovered in their decomposed state. These instances and

other reasons necessitated the need/urgency for the redesign of the Nigerian Legal Tender,

which the federal government believes/expects to curb once and for all, instances of

hoarding, insecurity, and the bastardization of the Nigerian currency.

The Central Bank of Nigeria also instituted a withdrawal policy that restricted withdrawals

from ATMs, point-of-sale devices, and over-the-counter locations to just N100,000 per week

for individuals and N500,000 for corporate organizations, but it was increased to N500,000

for individuals and N5,000,000. The Central Bank of Nigeria ordered banks to stop handing

out new, redesigned notes over the counter and to reload ATM machines instead to aid

circulation at the beginning of this year. However, because there is an insufficient supply of

new notes, banks are left with old notes that they must load into ATM machines. This is

despite the announcement that all Nigerians should deposit old notes as they will no longer be

accepted as legal tender as of January 31.

Even though organizations like the Nigeria Governors' Forum (NGF) and Bank Customers

Association of Nigeria (BCAN) expressed concerns and appealed for the Central bank of

Nigeria to extend the date and even the House of Representatives and the Senate urged CBN

in separate statements to extend the date, Mr. Godwin Emefiele, the Governor of the Central

bank of Nigeria, confirmed in a recent interview that the old currency notes will be phased

out of circulation by the end of January.

Everyone is still advised to obey the directives of the Central bank of Nigeria since their

decision is final.
REFERENCES

1. Currency redesign in Nigeria - http://www.lukmanyusuf.com/2022/11/currency-redesign-

innigeria.html?m=1

2. Letter to all deposit money and other financial institutions, primary montages and

microfinance banks – Central Bank of Nigeria

3. Monetary policy and its discontent redesigning the naira -

https://businessday.ng/opinion/article/monetary-policy-and-its-discontent-redesigning-

thenaira/

4. CENTRAL BANK ACT

5. BANKS AND OTHER FINANCIAL INSTITUTIONS ACT