The central bank governor, Godwin Emefiele, informed the general public in a press release dated January 29, 2023, that it has extended the period for the cash swap of old naira notes to new naira notes from January 31st, 2023 to February 10th, 2023.
He also stated that Nigerians still had a further 7 days after February 10th to deposit the old naira notes at central bank branches. He cited section 20 of the CBN Act as a basis for the extension.
- “A 7-day grace period, beginning on February 10 to February 17, 2023, in compliance with Sections 20(3) and 22 of the CBN Act allowing Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have lost its Legal Tender status.”
Critics of the central bank policy have stated in the media and in public places that the central bank act cited by the governor also allows Nigerians to return the old notes in exchange for new ones for a period of up to 4 months.
- “In fact, Speaker of the House of Reps, Femi Gbajabiamila stated that “the central bank act under section 20 allows the central bank to change the legal tender but it also says that after the expiration date, such naira notes change will no longer be legal tender but it says that even 5 months after, 3 months after, 2 months after, even in June only old notes presented to the bank shall be redeemed by the bank. That point needs to be made by the central bank to the public, it has not been made.”
But what does the act say?
- “20.-(1) The currency notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.
(2) The coins issued by the Bank shall, if such coins have not been tampered with, be legal tender in Nigeria at their face value up to such amount or amounts as may be determined, from time to time, by the Bank.
(3) 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 in that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this Sub-section, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.”
The last sentence highlighted above is key as this is where the law mandates the central bank to keep redeeming the old notes upon demand. It did not make any reference to any time frame as stated by the Speaker of the house of reps.
Section 22 mentioned above also refers to the stolen, lost, or mutilated notes and not a specific time period defined by law.
- “22.-(1) A person shall not be entitled to recover from the Bank the value of any
notes lost, stolen, mutilated or imperfect note or coin.
- (2) The circumstances in which, and the conditions and limitations subject to which, the value of the lost, stolen, mutilated or imperfect notes or coins may be refunded ex gratia shall be within the absolute discretion of the Bank.”