Prof. Chukwuma Soludo is the immediate past Governor of the Central Bank of Nigeria, CBN. At the end of his first tenure, he was not reappointed to continue for a second term. He had started his own variation of currency reconstruction by advocating the enhancement of the value of the Naira through the removal of a digit from the currency counting.
In other words, a nought(o) removed from say N1,000 would leave us with N100 which would retain its value as though it were N 1,000. Twenty Naira note would shed its nought to be two Naira but with the monetary value of N20 still.
Many Nigerians rejoiced at this prospect though some persons kicked against it for reasons more personal than nationalistic.
The opponents won the day and got the President then, Alhaji Umaru Musa Yar’Adua, to reverse an approval he had earlier given to Soludo. Indeed, a date was announced for the commencement of the new policy as CBN embarked on an awareness and sensitization campaign in the media and the mounting of workshops and seminars.
The late President’s somersault virtually sealed all hope of reappointing Soludo whose ideas had ruffled very important feathers among the “owners” of Nigeria. Soludo, an academic, technocrat and world renowned economist; the only African in a United Nations international panel to review the world economy, eventually bowed out of office, to be replaced by a fire spitting reform zealot, a practical man from the banking industry, Comrade Sanusi Lamido Sanusi, a former Managing Director of the First Bank of Nigeria Pic.
Sanusi made no secret of his disdain for his predecessor whom he variously denounced as a theoretician who was very innocent of the goings-on in the economy, especially in the banking industry.
To show that he knew better, he set about demonizing and demystifying many personalities in the banking world who Nigerians held in awe as giants and fat cats in the Nigeria economy.
As an insider indeed, Sanusi revealed the under bellies of proprietors of a number of indigenous banks whose empires were seized as they themselves went straight to jail from where they fought the battle of their lives.
That episode, important and eclamptic as it was to the banking industry and ipso facto, the Nigerian economy, is not the reason for this piece.
Our purpose here is to talk about Sanusi’s latest brainwave of restructuring the Naira. Unlike the man he took over from, he wishes to add more noughts to the currency by printing a N5,000 notes as the highest denomination of our national legal tender. As should be expected, opinions are fiercely divided as many vocal Nigerians aired their views.
Without any empirical proof, more people appear to have rejected the new policy than those in support. Our President, Dr. Goodluck Jonathan, has declared his support, without bothering to explain. The National Economic Management Team (NEMT) has also approved.
Interestingly, the Lagos Chamber of Commerce and Industry, LCCI, which usually makes weighty inputs in the analysis and dissection of the economy, especially the National Budget, approves the Sanusi policy, saying it will enhance “the portability of the Naira.”
But let’s hear out Sanusi himself, the 37th Governor in Nigeria!
Addressing the sixth Annual Conference of the Chartered Institute of Bankers of Nigeria, CIBN, in Abuja on September 11, 2012, Mallam Sanusi said that those opposing his new N5, 000 note were “ignorant of its benefits”.
Among the benefits is the enhancement of the “efficiency of the country’s payment system since the policy is targeted at a small number of Nigerians handling huge cash.” For the convenience of this “small number” the CBN will spend “N1bn to N2bn” to print N5, 000 notes, to be put into circulation before the end of April 2013.
Much earlier, spokesmen of the Central Bank had asked Nigerians not to bother because many of us might not even “see it or need it.” In fact we are told that we have a right to refuse the N5, 000 note if the bank gives it to us. Halleluya!
But Sanusi has a soft heart for poor Nigerians who happen to be in the majority. He is coming out with coins in the denomination of N5, N10 and N20! The paper currencies of these denominations will be eventually withdrawn from circulation.
In the quaint thinking of our all-knowing boss of the apex bank, Nigerians so far had rejected the use of coins because of their low face value. The minting of the new coins would cost the country N25bn by 2014. Not once, in his reported address to the CIBN Conference did Sanusi mention a word on the enhancement of the value of the Naira itself.
He is phasing out one kobo, five kobo and ten kobo coins “because Nigerians cannot buy anything with them.” So he will now give us coins in higher denominations of N20 and more!
Let’s end this with a Sanusi classic to justify his plan to introduce the N5, 000 currency note; “In the 1970’s, when N20 was introduced, N20 was the equivalent of 30 U.S Dollars. In 2012, when we would have introduced N5, 000 note; it will be the equivalent of 30 U.S Dollars.
“If you could buy 30 dollars with one N20 bill in 1978, you now need 250 N20 bills to buy 30 dollars. And you would have had to print those 250 bills, pay for the paper, the ink, for security features, for transportation, for insurance, for clearing, for the bullion van and processing. And these are costs to the economy.”
The Governor of Nigeria’s Central Bank, Sanusi Lamido Sanusi, says in the 21st Century Nigeria, that “the introduction of the N5, 000 bill would enhance the store of value function of the Naira.” For a man that is advocating e-banking and cashless transactions, the advent of a N5, 000 notes, to enhance “portability,” seems inexplicable and contradictory.
We certainly need a Governor of our apex bank who can restore value to the Naira, Nigeria’s national currency. And the counting of our Naira begins with one kobo, a hundred of which amount to one Naira.
If the British are still using their pence (pennies) and the Americans their cents and dimes, there is every cause for a Government in Nigeria to restore value to our kobo and Naira.