THE National Assembly on Monday said it would stop the Central Bank of Nigeria from introducing its proposed N5, 000 note.
While the Senate said only a major currency crisis could warrant a review as proposed by the CBN governor, Mallam Lamido Sanusi, the House of Representatives said the proposed review as far as it was concerned did not exist.
Sanusi had announced last Thursday the CBN’s proposal to roll out new N5,000 notes early next year and to convert to coins the present N5, N10 and N20 notes. There are already 50k, N1, and N2 coins in circulation which Nigerians had largely rejected.
Chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Bassey Otu, at a media briefing in Abuja, said the Senate would send a letter to Sanusi to stop the implementation of the proposed review of the nation’s currency.
Otu said, “We are asking, and we will be sending a letter to them (CBN) to stop all further actions until the Senate of the Federal Republic of Nigeria is properly briefed.
“We have 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 have used all the mechanisms we have to tackle it and it’s not really out of hand.
“I believe that a project of this nature requires parliamentary approval because there are numerous monetary and fiscal implications on the nation’s 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.”
Otu said the country had not developed the the basic infrastructure for efficient use of coins.
He stressed, “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.
“The CBN would have to prove that the policy is not a clear contradiction or at variance with the cash-less society which they have even yet to justify and whether this is the popular economic way to go.
“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.”
Otu recalled that the CBN in 2008 and 2009 came up with a proposal to re-denominate the currency to remove the zeros but did not happen, but wondered why there was a policy summersault.
On its part, the House stated that it expected that the CBN governor should have consulted with lawmakers before coming up with the policy.
“The House is not aware that the CBN intends to print N5, 000 notes. We have not been consulted. On such a matter as this, the National Assembly should be consulted. But, for now we are not aware”, House Deputy Majority Leader, Mr. Leo Ogor, told The PUNCH in a telephone interview on Monday.
Attempts to get reactions of the CBN to the National Assembly’s position failed. The CBN Director, Corporate Communications Department, Mr. Ugochukwu Okoroafor, did not pick calls to his mobile telephone. He did not also respond to a text message on the matter at the time of going to press.
Meanwhile, the leadership of the Trade Union Congress has called on President Goodluck Jonathan to withdraw the approval he granted to Sanusi to introduce the N5,000 denomination.
The TUC said the new policy would not serve the interest of Nigerians but that it would aggravate the nation’s economic crisis.
The TUC also called on the leaders of the CBN to suspend its decision on conversion of the lower denomination of N5, N10, and N20 notes and subject the issue to further discussions among Nigerians and to make public the implications of the new policy on the Nigerian taxpayer.
The TUC’s comments were contained in an electronic mail of Monday signed by its President General and Secretary General, Mr. Peter Esele and Chief John Kolawole, respectively.
The statement said the new policy would promote the scourge of corruption rather than fighting it, arguing that the introduction of the new N5, 000 notes would make it easier for large volumes of cash to be moved which they said would result in an unfortunate increase in corruption in the country.
The TUC statement read, “Once again, Nigerians are witnessing another round of the theatre of the absurd orchestrated by the Central Bank of Nigeria under the leadership of Sanusi Lamido Sanusi. Last time, we were treated to the unfortunate characterisation of the CBN as an unserious and insensitive Charity organisation run without recourse to statutes and due process…
“We do not see any serious value in what the CBN intends to do, especially at this time when we are confronted with bigger issues of insecurity, unemployment, hunger, poverty, disease, decaying social and physical infrastructure and the deepening of mistrust and widening of the ethnic gaps within the nation.
“Stability is the name of the game in money management if we are to achieve result but we do not see how this present action will lead to that.
“We therefore call on the CBN to immediately suspend this pursuit, allow it to be discussed nationally as our experience has shown that the outcome of this will affect the majority of Nigerians adversely before any further action is taken. We would also want the CBN to tell Nigerians what it will cost the taxpayers to move to this new currency regime.”