The Central Bank of Nigeria is going
ahead with the planned introduction of the N5,000 notes and the coinage
of N5, N10 and the N20 in spite of the directive by the Senate to halt
the process.
Investigations
showed that the leadership of the CBN had already called for tenders for
the production of the coins amid the controversy that greeted the
bank’s announcement.
It was gathered that the CBN had
shortlisted three firms from the United Kingdom, Germany and France to
tender for the multibillion naira minting job.
The three minting and printing firms
said to have been contacted are Delarue of Britain, D&G of Germany
and Orbether of France.
It was learnt that some of the top
officials of the CBN were surprised that the bank’s leadership did not
find it necessary to contact any of the Russian firms said to be reputed
for the production of quality bank notes.
It was gathered that the three foreign
firms were contacted based on their understanding of doing business in
the Nigerian environment.
CBN Governor, Sanusi Lamido Sanusi,
had
said during a news conference in Abuja on Aug. 23, that the bank had
secured a presidential approval to introduce the N5,000 denomination and
to coin the lower denominations of N5, N10 and N20.
Sanusi had described the planned review as ‘Project Cure.’
According to him, the proposed N5,000
note would have the portraits of three distinguished Nigerian women, who
contributed to the nation’s struggle for self-rule.
The women are Margaret Ekpo, Mrs. Funmilayo Ransome-Kuti and Hajiya Gambo Sawaba.
But the Senate, through its Committee on
Banking, Insurance and other Financial Institutions, objected to the
CBN’s decision and instructed the bank to suspend the move until it was
properly briefed.
The chairman of the committee, Senator
Bassey Otu, told newsmen in Abuja on Monday decision taken on the
nation’s currency required a parliamentary approval.
The senator warned the CBN against
sending the wrong signal to Nigerians, the domestic sector and the
international community that the naira is of no value.
“I believe that a project of this nature
requires parliamentary approval because there are numerous fiscal
implications on the entire economy.
“So, we are sending a letter to them to
stop all further actions on this until the Senate of the Federal
Republic is properly briefed,” he said.
Similarly, the House of Representatives on Wednesday summoned Sanusi to brief the House on the issue.
The Chairman, House Committee on Banking
and Currency, Mr. Chukwudi Onyereri, said during a news conference in
Abuja that the decision to summon Sanusi was informed by the fact that
the CBN had not informed the House of its plan to introduce N5,000.
Onyereri said that the House would
like to know if the proposed introduction of N5,000 notes did not
conflict with the cashless policy of the bank.
Investigations showed that the CBN board
had approved the production of 250 million pieces each of the N5, N10,
and N20 proposed coins.
It was learnt that the CBN authorities
had reduced the funds meant for the production of the coins from the
initial N11.8bn to about N8bn.
The current budget for the proposed coins production shows a difference of N3.8bn.
The board of the CBN had met in May and took a decision to introduce the N5,000 denomination into the economy.
The board agreed to give the minting and printing job to foreign firms with the requisite technology.
Out of the N40.3bn that was approved for
the implementation of the policy on the nation’s currency, the board
approved N11.8bn for the minting of coins.
The 11-man CBN board comprises five executive members and six non-executive members.
The executive members of the board are
Sanusi, who is Chairman; the Deputy Governor, Financial System
Stability, Dr. Kingsley Moghalu; Deputy Governor, Operations
Directorate, Mr. Tunde Lemo; Deputy Governor, Economic Policy, Dr. Sarah
Alade and Deputy Governor, Corporate Service Directorate, Alhaji
Suleiman Baraju.
Their non-executive counterparts are a
former Head of Service of the Federation, Mr. Stephen Oronsaye; the
Accountant General of the Federation, Mr. Jonah Otunla; the Permanent
Secretary, Ministry of Finance, Mr. Dalandi Kifasi; Prof. Samuel Olofin
and Mallam Dahiru Mohammed.
Investigations showed that the CBN,
which operates under the CBN Act of 2007, has full autonomy in the
discharge of its statutory responsibilities.
The Director, Corporate Communications
of the CBN, Mr. Ugochukwu Okoroafor, stated during a news conference in
Abuja on Thursday that “the law is very clear on who does what.”
He insisted that the CBN had not
overshot it limits by the move to restructure the nation’s currency,
stressing that the mandate of the bank was “clearly stated by the Banks
and Other Financial Institutions Act and the CBN Act of 2007.”
He said, “But it’s important to note
that the law is very clear on what our responsibilities are; it’s very
clear on the process as far as this matter is concerned and we are
completely within our mandate and we have made that point clear and
there is no problem because the law is very clear on who does what.”
Sections 17, 18 and 19 of the CBN Act of
2007, which Ugochukwu relied on, gives the CBN full autonomy on the
issue of currency production with recommendation from the board and
approval by the President.
“The bank shall have the sole right of
issuing currency notes and coins throughout Nigeria and neither the
Federal Government nor any State Government, Local Government, other
person or authority shall issue currency notes, bank notes or coins or
any documents or tokens payable to bearer on demand being document or
token which are likely to pass as legal tender.
“The bank shall arrange for the printing
of currency notes and the minting of coins; issue, re-issue and
exchange currency notes and coins at the bank’s offices and at such
agencies as it may, from time to time, establish or appoint; arrange for
the safe custody of un-issued stocks of currency notes and for the
preparation, safe custody and destruction of plates and paper for the
printing of currency notes and disc for the minting of coins; and
arrange for the destruction of currency notes and coins withdrawn from
circulation under the provisions of section 20 (3) of this Act or
otherwise found by the bank to be unfit for use.
“The currency notes and coins issued by
the bank shall be in such denominations of the naira or fractions
thereof as shall be approved by the President on the recommendation of
the board; and of such forms and designs and bear such devices as shall
be approved by the President on the recommendation of the board,” the
sections read.
Okoroafor, however, denied that the CBN budgeted N40bn for the printing and minting of the notes and coins.
The CBN spokesman was, however, not
forthcoming on the total quantity of the N5,000 notes and the quantity
for the three proposed coins and the cost of the job to the nation’s
treasury.
“The N40bn that was reported would be
used to print the N5, 000 notes is not true. Go and check our annual
report and you will see how much we are using to print the naira. This
is something we haven’t even done. Pick the annual report and see the
cost of printing currency and that is what you should use in your
analysis,” Okoroafor said.
However, the Medium Term Budget Forecast
of the CBN submitted to the Senate in May showed that the bank budgeted
N87.85bn for currency management and monetary policy operations in the
2012 fiscal year.
The budget reflected an increase of N9.94bn over the N77.91bn provided for in the 2011 budget.
CULLED: PUNCH
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