According to the committee’s chairman, Senator Bassey Otu, such decision made by the CBN requires parliamentary approval because it has fiscal implications on the economy.
He posits that “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.”
Otu, who said this in a press briefing at the National Assembly yesterday, criticised the monetary change plan of the apex bank. He said that the CBN did a similar thing four years ago with the introduction of N1,000 and the outcome was not pleasant.
On the reintroduction of coin, Otu said the country had not developed the basic infrastructure for efficient use of coins.
“We believe that the coinage works very well where there are infrastructures and we have not developed that basic infrastructure and even now, the coins are nowhere to be found.”
“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.”
He therefore calls on the CBN to prove that the policy is not a clear contradiction with its cash-less initiative.
“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,” Otu said.
The senates are no alone in criticising the monetary move. Some economists also belive that the introduction of the N5,000 note is inappropriate as it would later cumulate to inflation in the country.
The leadership of the Trade Union Congress has also called for the withdrawal of the approval on the introduction of the N5,000 denomination.
“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,” a statement released by the congress stated.
“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.”
However, while others criticise the action of the CBN, Prof. Omo Omoruyi, the former Director-General of the defunct Centre for Democratic Studies (CDS) stated that it is the right of the apex bank to take such decision.
“We tend to politicise everything in this country. I believe the CBN must have done its homework. The moment we make so much noise about such things, there could be unanticipated results. Whatever the argument is, the CBN has the exclusive right to do so,” Omoruyi posits.
The proposed currency review which will cost about N40billion naira was approved by President Goodluck Jonathan was approved on December 19, 2011.
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