Chairman, Senate Committee on Rules and Business, Senator Ita Enang
Onwuka Nzeshi and Dele Ogbodo
The currency restructuring project and proposed introduction of the N5,000 banknote by the Central Bank of Nigeria (CBN) may have run into a hitch Tuesday, as both chambers of the National Assembly rejected the project.
The rejection came just as the Cross River Political Network stormed the National Assembly in protest against the continued silence of the government to seek a review of the ruling of the International Court of Justice (ICJ) on the ceding of Bakassi Peninsula to Cameroun.
In separate motions, the parliamentarians unanimously voted against the currency restructuring proposal, termed Project Cure, and urged President Goodluck Jonathan to direct the CBN Governor, Mallam Sanusi Lamido Sanusi, to halt the project.
However, the House directed its Committee on Banking and Currency to conduct an investigation into the planned restructuring of the currency and report back in four weeks.
While the investigation lasts, the House said the CBN must suspend all plans and processes towards the actualisation of the project.
In addition, the lower chamber of the parliament has resolved to pursue the amendment to the CBN Act to ensure that in the future the central bank is compelled not only to submit its annual budget for parliamentary scrutiny, but seeks parliamentary approval on issues such as currency restructuring and re-denomination.
Chairman, Senate Committee on Rules and Business, Senator Ita Enang, who led the debate in the upper chamber, said the policy was contradictory to the cashless policy already being executed by the CBN.
President of the Senate, Senate David Mark, who expressed concern about CBN actions, said he learnt of the policy through the pages of the newspapers.
According to Mark, the CBN governor acted ultra vires when he floated the project without considering input from the National Assembly.
He also argued that the currency restructuring plans by CBN do not address the country’s economic problems and that the CBN has not been able to substantiate the reason for the planned introduction of the N5,000 banknote to the economy.
“I think the most important thing is that if Nigerians say that they don’t want a particular policy at a given moment, there is no harm in government retracing her steps.
“I have listened to the arguments from those who support the introduction of the policy, but those arguments are simply not convincing and they appear to me to be highly theoretical, technical in nature and they don’t address any practical issue on the ground.
“I think the disadvantages of the introduction of the N5,000 note at the moment far outweigh the advantages of introducing it and on balance we would not go for it,” Mark said.
Some other lawmakers who contributed to the debate said the timing was wrong and that the policy was unnecessary at the moment.
Chairman, Senate Committee on Information and Media, Senator Enyinnaya Abaribe, who addressed journalists after the plenary, said the Senate considered the matter as very urgent because of the likely impact of the currency restructuring exercise on the populace.
He said the resolution of the Senate is that the proposed action of CBN was illegal because it directly contravenes Section 4(2) of the constitution which states: “The National Assembly shall have power to make laws, order good governance of the federation or any part thereof on any matter included in the exclusive legislative list set out in Part 1 of the Second Schedule of this Constitution.”
Abaribe added that on the basis of the relevant section of the constitution, the National Assembly has the legislative power to order the reversal of any of CBN’s plans.
In the House of Representatives, Chairman, Committee on Rules and Business, Hon. Albert Sam-Tsokwa, led the debate against the N5,000 banknote project, which was premised on a motion sponsored by 21 lawmakers.
Sam-Tsokwa expressed worry that the currency restructuring was coming when the cashless policy was yet to fully sink into the psyche of the citizens.
He described the views expressed by some economists and professionals that the N5,000 note will not cause inflation or reduce purchasing power of the currency as misleading.
“The policy is also inconsistent with international best practices as leading economies like the United States of America (USA), Britain and China do not have such high currency notes in circulation.
“The largest denomination of the British pound currently in circulation is the fifty pound note and that of the United States is the one hundred dollar bill.
“The United States had at a point in time experimented and introduced high denominations such $500, $1,000, $5,000 and $10,000 but phased them out or withdrew them from circulation due to their adverse effects on the US economy as well as the use of electronic money transfer,” he said.
Chairman, House Committee on Banking and Currency, Hon. Jones Onyereri, also briefed the House on the policy, stating that the CBN did not intimate the relevant committees of the parliament before introducing the currency restructuring project. He added that the committee had conveyed its strong reservations on the issue to the central bank.
Also, the House yesterday renewed its clamour for the sack of the Director General, Securities and Exchange Commission (SEC) Ms Arunma Oteh, insisting it was not prepared to back down on its earlier resolution on the matter.
At its resumed sitting yesterday, the lower chamber of the National Assembly passed a resolution requesting the president to remove Oteh from office for allegedly being unqualified by law to occupy the position, incompetence and her inability to manage the organisation.
The House warned that it shall henceforth cease to accord any recognition to Oteh or deal with the embattled lady as the Director General of SEC.
In what appeared like an ultimatum, the House directed its Committee on Legislative Compliance to monitor developments on the issue and to brief it on the level of compliance with their resolution within the next 14 days.