Elizabeth O.
Businesses reject old notes as FG , CBN keeps Mute
Despite the Supreme Court order extending the old notes phaseout deadline, as well as advice from the International Monetary Fund (IMF) and the World Bank, the government and the apex bank maintained studied silence as of yesterday.
The Central Bank of Nigeria is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958 and commenced operations on 1 July 1959
The major regulatory objectives of the bank as stated in the CBN Act are to: maintain the external reserves of the country, promote monetary stability and a sound financial environment, and act as a banker of last resort and financial adviser to the federal government.
The central bank’s role as lender of last resort and adviser to the federal government has sometimes pushed it into murky regulatory waters.
After the end of imperial rule the desire of the government to become pro-active in the development of the economy became visible especially after the end of the Nigerian civil war, the bank followed the government’s desire and took a determined effort to supplement any show shortfalls, credit allocations to the real sector.
The bank became involved in lending directly to consumers, contravening its original intention to work through commercial banks in activities involving consumer lending.
The Council of State, senior lawyers and economic experts had also advised that the old and new notes be allowed to co-exist as legal tenders.
As a result of the lack of direction from the government, Nigerians have started rejecting the old notes.
