Senate yesterday ordered the Central Bank of Nigeria (CBN) to stop any action on the issuance of N5, 000 note and its proposed restructuring of other currencies. The CBN said last Thursday, that the new note would come into effect next January while the N5, N10 and N20 notes would be turned into coins. But the Upper House said that the CBN has not “properly briefed” the Senate and by extension, the National Assembly over the new notes and the proposed restructuring.
The Senate’s decision was conveyed through its Committee on Banking, Insurance and other Financial Institutions. Senator Bassey Otu chairs the committee. The Upper Legislative Chamber’s position sharply contradicts the Presidency’s which reportedly approved of CBN’s restructuring of the naira in 2011.
National Assembly sources told Daily Sun that the CBN Governor, Mallam Sanusi Lamido Sanusi, may have briefed President Goodluck Jonathan about the new notes and plans to restructure the others. Sanusi reportedly secured the President’s approval before going public with the new move last week. Regardless, Senate yesterday ordered CBN to stop the process and recalled that moves to re-denominate the naira in 2008/2009 failed and wondered reasons behind the policy sommersault.
His words: “There’s need for us as a committee to comment on this topical issue. I chair the Senate Committee on Banking, Insurance and other Financial Institutions. We’ve read in the papers, just like you did about the currency restructuring the CBN wants to embark on. “I believe that a projector of this nature requires parliamentary approval because there are numerous monetary and fiscal implications on the economy.
This type of action is only taken where there is a major currency crisis and the CBN must be careful in order not to send a wrong signal or message to households or the domestic sector or even the external economies that the Nigerian currency is valueless which I believe is definitely not and that for every unit of value, they need to carry a large quantity of cash.
“The CBN in 2008 and 2009 came up with a proposal to re-denominate the currency; that was even to remove the zeros. This was just in 2008/2009. Here we are in 2012, and we are seeing a kind of policy sommersault, even though we understand the dynamics of the sector very well. “I believe we have to be well briefed on this and also, in 2005, the CBN undertook a major currency restructuring which ran into billions of naira.
Till date, the proper value assessment has not been done to know its cost to the Nigerian taxpayer and 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 moulding bangles and earrings and so on and so forth.
“So, we believe that the coinage works very well where there are infrastructure and we’ve not developed that basic infrastructure and even now, the coins are nowhere to be found now. “So, the CBN would have to prove that the policy is not a clear contradiction or at variance with the cashless society which they are even yet to justify and whether this is the popular economic way to go. “We are asking, and we will be sending a letter to them to stop all further actions until the Senate of the Federal Republic of Nigeria is properly briefed.”
“Well, we’ve not been properly briefed and we don’t know the reason for it, even though at the moment, we do know that inflation is really a problem, but I don’t think we’ve used all the mechanisms we have to tackle it and it’s not really out of hand. Asked if the committee or the Senate was in the know at the conception stage, Otu reiterated that the introduction of the new note is news to the Senate as well as other Nigerians.
“There was no meeting in any form to that effect. As I told you earlier, we got the news just like other Nigerians; in fact, we read it on the pages of newspapers as well.” Otu also dismissed comments that the CBN Act may not have compelled the apex bank to brief the Senate or the National Assembly before embarking on the exercise.
“This is a major, major policy issue and there’s no way this kind of a thing can go on without us not knowing anything about it. We must know the detail in order to know how it would affect the Nigerian people. To those moments, we don’t need to be bothered about any Act at this point. “We are not going to rely on laws per se. What we mean to do here is what is best for the Nigerian people.
The Senate is not really against the independence of the CBN but what we want in place is proper checks and there should be checks and balances in all the things we do. At some point, we would be able to sit down together to look at the merits and demerits of this policy. “But till date, we don’t know anything about it and we don’t know what people stand to gain. Until that is properly put through, everything about the N5,000 note issuance must stop,” Otu said.
via Daily Sun
http://sunnewsonline.com/new/cover/senate-stops-new-n5000-note/
| Posted: at | |
TRENDING GISTS 
Why We May Not Accept N100,000 As Minimum Wage - Organized Labour Explains
JUST IN: Chelsea Sack Their Coach, Mauricio Pochettino
Wahala Jam Network! “English Na Your Mate” - Nigerians React To Seyi Vibez’s Old Interview
Nigerian Mother of Two, Margaret Atayi Reportedly Commits Suicide Over Failed Marriage
BREAKING: Federal Govt Increases Minimum Wage From N48,000 to N54,000
Tonto Dikeh Laments After Her White Friend Invited Her to Zoom Burial For Her Cat