The Senate Committee on Banking, Currency and other Financial Institutions yesterday ordered the Central Bank of Nigeria to halt its planned altering of Nigeria’s currency structure with the introduction of the N5,000 note.
The Committee chairman, Mr. Bassey Otu, expressed surprise during a media briefing saying such proposed change required a comprehensive legislative input before decisions are made.
“As a committee we should do our work. Today (yesterday) there is a burning issue in our country and there is need for us as a committee to comment on this topical issue. We have 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 it has fiscal implications on the economy,’’ he said.
“This type of action is only taken where there is 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,’” he admonished.
He demanded that the CBN must justify the rationale behind the planned introduction and endeavour to clarify the seeming conflict between its introduction and the CBN’s much touted cashless policy.
Faulting the previous apex bank’s restructuring exercise, the senate committee chairman 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.”
The governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, had last Thursday announced the apex bank’s plan to redesign the N50 note and introduce a N5,000 denomination.
He attributed the proposed introduction of the high denomination note to “inflationary pressures”.