The Senate has directed the Central Bank of Nigeria (CBN) to suspend its plan to introduce N5, 000 note, describing it as a policy somersault.
Addressing journalists in Abuja yesterday, the Chairman of the Senate Committee on Banking, Currency and other Financial Institutions, Senator Bassey Otu (PDP, Cross River South) slammed the CBN Governor, Sanusi Lamido Sanusi, for not informing the National Assembly before rolling out the plan, saying the Senate would soon formally send a memo to the CBN to stop all further actions on the matter until the Senate is properly briefed.
According to him, moving against the proposed new currency note does not imply that the Senate is against the independence of the apex bank, but rather, the upper chamber is concerned about how adversely the new currency will affect Nigerians.
The senator, who said such a policy is usually introduced where there is a major financial crisis, warned the CBN against sending a signal that the nation's currency is valueless.
He said: "I believe that at some points, we will be able to sit down together and look at the merits and demerits of this currency policy, but till date, we don't know anything about it and what the people stand to gain. Until that is properly put through, we say everything about it must stop. A project of this nature requires parliamentary approval because there are numerous and fiscal implications on the entire economy. This type of action is only taken where there is a major financial 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.
"The CBN, in 2008 and 2009, came up with a proposal to re-denominate the currency that was even to take off the zeros. This was just 2008 and 2009 and here we are in 2012, the CBN is seeing a kind of policy somersault. 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. Till date, a proper value has not been done to know its costs to the Nigerian taxpayers and the extent of the benefits and in that 2005 coinage, I think it did not work at all because both the goldsmiths and the blacksmiths converted the coins to molding bangles, earrings and so on etc.
"So, we believe that the coinage works very well where there is infrastructure to take it like a half, probably like a parking where you go and put it etc. We have not developed that real basic infrastructure and most of those coins 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 cash-less economy, which it (CBN) is even yet to justify and whether this is the popular economic way to go. So, we are asking and we are sending a letter to them (CBN) to stop all further actions on this until the senate of the federal Republic is properly briefed".
"We do not know the reason for it, even though at the moment we do know that inflation is a problem, but I don't think that they have used all the mechanisms to tackle it and it is not really out of hands. There has not been any meeting with the CBN yet. This is a major policy issue and there is no way this kind of thing can go on without us knowing everything about it in order to know how it will affect the people of Nigeria. Actually, we are not really going to rely on laws per se, what we are trying to do here is what is best for the Nigerian people."
Daily Trust