Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi
By Dele Ogbodo
The Senate Committee on Banking, Currency and other Financial Institutions has ordered the Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, to suspend forthwith all plans to introduce the N5, 000 banknote into the economy next year.
Its Chairman, Senator Bassey Otu, told reporters Monday in Abuja that the committee had also ordered the immediate suspension of the restructuring of the nation’s currency until the Senate is properly briefed.
He said members of the Senate knew about the currency restructuring on the pages of the newspapers, adding: “I believe that a project of this nature requires parliamentary approval, because of the numerous and fiscal implications on the entire economy.”
The CBN, he said, must be careful in order not to send a wrong signal to households, domestic sector and even the external ones, as the Nigerian currency has not degenerated to such level that it will require such a high denomination of currency.
According to him, there has not been any meeting between the National Assembly and CBN over the planned restructuring.
Otu said: “Well, this is a major policy issue and there is no way this kind of thing can go on without us knowing everything about the details in order to know how it will affect the people of Nigeria.”
Faulting CBN for the failure of previous restructuring to add value to the economy, he said: “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 are seeing 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. Also in 2005, the CBN undertook a major currency restructuring which ran into billions of naira.”
According to him, the CBN is yet to do a proper value assessment and its costs to the Nigerian taxpayers and the extent of the benefits, adding: “In that 2005 coinage, I think it did not work at all because, both the goldsmiths and the blacksmiths converted the coins to moulding bangles and earrings.”
The introduction of coinage into the economy can only work where the infrastructure exists, he said.
“We have not developed that real basic infrastructure and those coins previously introduced, most of them are nowhere really to be found. So, 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,” he said.
The CBN last Thursday had unveiled plans to restructure the naira and introduce a new N5, 000 banknote denomination into the economy.
Under the proposed new currency structure, which is expected to be officially launched in 2013, the existing denominations of N50, N100, N200, N500 and N1, 000 are to be redesigned with added security features.
Similarly, the lower banknote denominations of N5, N10, and N20 will now be coined.
Sanusi, who unfolded the plan at a press briefing in Abuja, added that 12 new currency structure would emerge at the end of the exercise.
Sanusi said the introduction of a higher bill would aid the apex bank's cashless policy drive as well as lead to the modernisation of the economy as it would lead to reduction in the volume of currency-in-circulation in the long term.
On the autonomy of CBN, Otu said: “The Senate is not really against the independence of the CBN,” adding: “What we want to be put in place is proper checks and balances in all these things that we do.
“I believe that at some points, we will be able to sit down together and look at the merits and demerits. But till date, we do not know anything about it and we do not know what the people stand to gain, and until that is properly put through, we say everything about it must stop.”