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.