THE Governor of the Central Bank of Nigeria,CBN, Mr. Lamido Sanusi, yesterday, intensified his campaign for the introduction of N5,000 note, by saying that comments by former President, Olusegun Obasanjo on the proposed currency restructuring was incorrect and showed that the former president is a bad economist.
Speaking at the Annual Conference of the Chartered Institute of Bankers of Nigeria, CIBN, in Abuja, Sanusi said Obasanjo’s comments came to him as a shock, considering the fact that it was during his tenure as president that majority of the country’s highest currency denominations were printed.
He said Obasanjo introduced more higher-denominations than any other president of the country and was surprised that he could condemn the proposed introduction of the N5,000 note.
According to Sanusi, those opposing the introduction of the N5,000 were ignorant of its benefits, adding that its introduction would lead to efficiency of the country’s payment system since the policy was targeted at a small number of Nigerians handling huge cash.
He said Obasanjo’s assertion that the introduction of higher bills would stimulate inflation, was not true, stating that if this assertion was true, Nigeria would have gone into extinction within the eight year period that Obasanjo introduced the N100, N200, N500 and N1000 notes.
He said: “This is an interesting country because my uncle or my father who was our former head of state, General Obasanjo, who we all know is a very successful farmer, is a very bad economist; especially for saying that the introduction of higher denomination will cause inflation and improve hardship.
“Obasanjo introduced N20, N100, N200, N500 and N1, 000. He had introduced more higher-denomination currencies in Nigeria than any other head of state.
“He did N100 note in 1999, he did N200 in 2000, he did N500 two years later and in that period, inflation was coming down because it was accompanied by prudent fiscal and monetary policy.
“It is wrong for somebody, like Obasanjo, who had done this to stand up and say introducing a higher denomination will cause inflation.
“We all know that we cannot have inflation by printing higher bills if you don’t increase money supply and this is simple economics.”
On the benefit of the restructuring of the currency, Sanusi said: “We are introducing coins for various reasons. First as part of cost management; the N5, N10 and N20 note have a very high frequency and we have to replace them every three months but the coins last longer.
“Second, we are working on a hypothesis that the reason Nigerians do not accept the coins is because they couldn’t buy anything with them and, maybe, if you give them coins that have value as a medium of exchange they would accept them.”
He said the introduction of the N5, 000 would enhance the store of value function of the naira.
“In the 1970s, when the N20 was introduced, it was the equivalent of $30. In 2012, when we would have introduced N5, 000 note, it will be the equivalent of $30.
“If you could buy $30 with one N20 bill in 1978, you now need 250 N20 bill to buy $30 and you would have had to print those 250 bills, pay for the paper, the ink, for the security features, for transportation, for insurance, for clearing, for the bullion van and processing and these are cost to the economy.”
Bankers throw weight behind N5,000 note
Meanwhile, the Bankers Committee and the Chartered Institute of Bankers of Nigeria, CIBN have thrown their weight behind the apex bank on the introduction of the controversial currency into the economy. At two separate meetings in Abuja, the bankers said they did not see anything wrong with the proposed currency note.
The Bankers committee made its position known to journalists by the Group Managing Director of UBA, Philip Odueze at a press briefing at the CBN head quarters after its meeting, while the position of the Chattered Institute of Bankers of Nigeria was made by its president, Mr. Segun Aina at the institute’s 6th Annual Banking and Financial Conference held at Transcorp Hilton Hotel Abuja.
CBN to begin audit of banks’ control staff
The Central Bank of Nigeria, CBN, also directed all banks in the country to furnish it with the names of staff currently manning controlled functions, to enable it assess the skills, qualifications, experience and competencies of such staff.
In a release signed by CBN’s Director, Financial Policy and Regulation Department, Y. B. Duniya, titled “Assessment of Competencies in the Nigerian Banking Industry,” CBN said, “further to the Exposure Draft on the Competency Framework for the Nigerian Banking Industry, issued on June 26, 2012, we advise stakeholders that we have noted and incorporated as appropriate, observations submitted in respect of the exposed draft.
“However, there is the need to assess the skills, qualifications, experience and competencies of staff currently occupying controlled functions as provided in Appendix B of the Draft Framework.”
This will enable the Bankers’ Committee identify at the preliminary stages, gaps that would impede the effective implementation of the Framework. It is important to remind stakeholders that the list of controlled functions is not exhaustive as other important roles and responsibilities may be added to it.
“Accordingly, all Deposit Money Banks are directed to avail the CBN of the following: names of staff manning the controlled functions specified in Appendix B of the Draft framework; academic and other relevant qualifications of the incumbent staff.”
Other requirements include: “number of years’ experience on the control function, post qualification and general banking experiences; other competencies that support the performance of the control functions; and; details of identified deficiencies in skills, qualifications, experience and competences as well as measures envisaged to remedy the positions within 18 months of the approval of the Framework.”