By BARTHOLOMEW MADUKWE
With the controversy surrounding the Central Bank of Nigeria’s (CBN) attempt to introduce a single N5,000 note and reduce existing N5, N10 and N20 notes to coins by early 2013 without appropriation by the National Assembly, Vanguard Law & Human Rights sought the view of lawyers on whether the apex bank has power to carry out a comprehensive review of the country’s currency as allegedly approved by the President, without clearance from the National Assembly. Excerpt:
Section 17 of CBN Act empowers the CBN to print notes, mint coins and other approved legal tenders. On the strength of the provision of Section 17, the CBN is empowered to print notes and coins, however, such power is subject to the provision of the constitution (Section 81).
The intention of CBN to introduce new notes and/or change certain denominations is on course only to the extent that the fund requested for such action must have been provided for in the Appropriation Bill. If there is no provision for this in the Appropriation Bill, then the CBN would be acting ultra vires the provision of Section 81 of the constitution.
The provision of Section 81 of the Constitution is with respect to authorization of expenditure from consolidated revenue fund. It is to the effect that the National Assembly, upon presentation by the President of the Appropriation Bill, would approve the revenue and expenditure of the Federation for the year represented by the Appropriation Bill. The government cannot make expenditure not otherwise approved by the National Assembly.
However, if the CBN has a separate fund reserved for printing the new notes, outside the fund covered by the Appropriation Bill, then the CBN can go ahead with its planned implementation. It should be noted that by the provision of the CBN Act, the CBN is an autonomous body, not tied to the apron spring of the Federal Government.
Chief Morah Ekwunoh
I agree, but only in part, with the view that proposed introduction of N5000 note, and change of some paper denominations, namely N5, N10 and N20, to coins without appropriation by the National Assembly, has run counter to the provisions of section 81 of the 1999 Constitution, as amended; and section 17 of the Central Bank Of Nigeria Act.
The superstructure of this stand is built on the foundation that, whereas the exercise is in clear violation of section 81 of the said Constitution, same cannot be said of its violation of section 17 of the Central Bank of Nigeria Act, Volume 2, Cap C.4, Laws of the Federation of Nigeria, 2004.
Under the said section 81, financial year estimates of the revenue and expenditures of the Federation for the financial year, which, of course, includes acts, costs, and expenses relating to re denomination of the Currency, should be presented to the National Assembly for legislative approval.
This, not having been done in this case of sudden proposed introduction of N5000 note, and change of some denominations to coins, in strict law, violently violates the spirit, goals and intendment of the said section 81. This is wrong in a democratic setting which we are all working very hard to nurture.
However, the Central Bank can still put its house in order, by taking shelter under section 81 (4)(b) of the same Constitution, through which supplementary, and un-anticipated, acts, costs and expenses, as in this case, can be accommodated and, in law, justified.
As to whether the proposed exercise violates section 17 of the Central Bank of Nigeria Act, my take is that it does not, since, under the said section, the Bank has the sole right of issuing notes and coins throughout Nigeria, and no other person, other than the Central Bank, shall issue currency notes, bank notes or coins or any document or token capable of passing as legal tender. Its legislative authority in this regard appears further cast in iron, when section 18(b), among others, of the same Act, confers on it the sole power to issue and re-issue, for exchange, notes and coins.
It is against the background of the aforementioned crystal clear positions that I agree, only in part, that the proposed introduction of N5000, and change of some notes to coins without appropriation by the National Assembly, has run counter to section 81 of the 1999 Constitution, as amended, and, section 17 of the Central Bank of Nigeria Act.
What I think is that Section 18 of the CBN Act requires a presidential approval before they can change the currency, otherwise it will be illegal. On CBN Governor’s threat to go on with the plan of carrying out a comprehensive review of the country’s currency , well I think he is just bluffing. I think he would back out at some stage. He cannot do that unless the president has approved it. If the president has not approved, then he cannot go ahead.
He should produce the presidential approval, if he is saying that the president has approved it. It cannot just be by words of mouth. If he is alleging that the president has approved, then he should bring out the documents showing that the president has approved it. However, the National Assembly is not the one required under Section 18 of the CBN Act, only the president can.
Relevant section of the CBN Act reads: “The bank shall have the sole right of issuing currency notes and coins throughout Nigeria and neither the Federal Government nor any State Government, Local Government, other person or authority shall issue currency notes, bank notes or coins or any documents or tokens payable to bearer on demand being document or token which are likely to pass as legal tender.
“The bank shall arrange for the printing of currency notes and the minting of coins; 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; 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 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.”