Nigeria: Lawmakers Overrule Sanusi On N5,000 Note

By IndepthAfrica
In News
Aug 28th, 2012

Sanusi Lamido Sanusi

The Senate yesterday faulted the new Central Bank of Nigeria (CBN) currency policy and consequently asked it to stop the plan to introduce the N5,000 note immediately.

The Senate also warned that no such policy that has far reaching implication on the people must be embarked on without its knowledge of and other stakeholders, adding that ‘until this is done the CBN’ must stop action.

Senate handed down the order through its Chairman, Senate Committee on Banking, Currency, Insurance and other Financial Institutions, Senator Bassey Otu (Cross Rivers, South).

Addressing a press conference in Abuja, he informed that the Senate was sending a letter to CBN to stop all further actions on printing of the new N5,000 note until the Senate of the Federal Republic was properly briefed.

The new policy, he added, was scary and would send wrong signals to both the domestic and international business community.

Senator Otu said the Senate believed the action was only taken where there was a major crisis and “the CBN must be very careful in order not to send a wrong signal or message to households, domestic sector and even the external ones that the Nigerian currency is valueless, which I believe it is definitely not, and that for every unit of value they need to carry a large quantity of cash.

“As a committee, we should do our work. This morning there is a burning issue that is going on in our country and there is need for us; as a committee to comment on this topical issue. I am the chairman of the senate committee on banking, currency and other financial institutions. We have also read in the papers just like you about the currency restructuring that the CBN embarked on.

“I believe that a project of this nature requires parliamentary approval because there are numerous fiscal implications on the entire economy. The CBN in 2008 and 2009 came up with a proposal to re-denominate the currency, that was even to take off the zeroes. This was just 2008 and 2009 and here we are in 2012 we have seen a kind of policy somersault even though we understand the dynamics of the sector very well. I believe that we have to be well briefed on this.”

He further disclosed that in 2005, the CBN undertook a major currency restructuring which ran into billions of Naira, adding that till date, a proper valuation had not been done to know it’s costs to the Nigerian taxpayers the extent of the benefits and in that 2005 coinage. “I think it did not work at all because both the goldsmith and the blacksmith converted the coins to molding bangles, earrings and so on,” he remarked.

According to him, the CBN will have to prove that the policy is not a clear contradiction or at variance with cashless society, which they are even yet to justify and whether this is the popular economic way to go.

Fielding questions, the lawmaker declared: “Well, we have not been properly briefed yet, so I would not know, we do not know the reason for it, even though at the moment we do know that inflation is a problem, but I don’t think that they have used all the mechanisms to tackle it and it is not really out of hands.

He said he believed that at some point the Senate would be able to sit down together with the CBN and look at the merits and demerits, but till date the upper chamber was in the dark of the CBN’s plan.

TUC condemns proposed CBN N5000 note

The Trade Union Congress (TUC) has condemned the plan by the CBN to produce five thousand naira (5000) denomination.

This was disclosed in a press statement signed by the union President, Comrade Peter Esele and the secretary, John Kolawole.

According to Esele, “Nigerians are witnessing another round of the theatre of the absurd orchestrated by the Central Bank of Nigeria under the leadership of Sanusi Lamido. “We were treated to the unfortunate characterization of the CBN as an unserious and insensitive charity organization run without recourse to statutes and due process. We are surprised that the CBN could at this time decide to embark on the mission to make changes to the nation’s currency and to also create a N5, 000 denomination. The intention at coining the N5, N10 and N20 denominations does a psychological damage to the value of the Naira. We are surprised that despite CBN’s acquiescence to this, it still intends pushing forward with this objective”.

TUC considered the development a deep confirmation that those managing the different facets of nation’s economy did not have time to give deep thought to their policies before churning them out and executing them.

Esele stressed that the decision showed a continued and persistent inconsistency in policy objectives within the CBN family which made it impossible for the nation to reap any benefit from previous policy decisions.

TUC maintained that despite all the voices that were raised in opposition and seeking answers as to whether the CBN and other participating agencies including the Nigerian people were ready for the cashless economy, it went out in the din and sheer weight of the media.

The statement read: “It should be remembered that the CBN has changed the face of the Naira severally in the past years, mouthing the same arguments which have all proved in the long run to be baseless. We see this rather as a sign of a monetary system management gone awry and the deeper malaise of the continued wrongheaded management of the nation’s foreign exchange receipts.”

The union expressed surprise that President Goodluck Jonathan could grant approval to CBN to embark on changing the naira.

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