The Congress for Progressive Change (CPC) has dismissed the call by
the Nigeria Labour Congress for the sack of Mallam Sanusi Lamido Sanusi,
the governor of the Central Bank of Nigeria, as hypocritical, cheap and
opportunistic. Mallam Sanusi had recommended to the federal government the firing of
50 per cent of its workers in view of its overwhelming recurrent
expenditure.
“Whilst we do not agree that the cause of the exorbitant recurrent
expenditure is wholly due to the size of the public service work-force
and that the sacking of half its size is the solution to the identified
problem, we believe the call for the call for the sacking of the
forthright Public officer for volunteering his personal opinion is
equally preposterous,” CPC said today in a statement signed by Rotimi
Fashakin, its National Publicity Secretary.
CPC that the fiscal indiscipline of this Jonathan-led administration
has exacerbated Nigeria’s malaise, and that rather than vilifying the
CBN governor for expressing a personal opinion, the important thing
ought to be meaningful discourse on how to extricate Nigeria from the
financial recklessness of the PDP-led Federal Government.
“As a Party, we have equally taken note of the ignominious manner
this present crop of Labour leadership truncated, in January 2012, the
people’s popular refusal to yield to the exploitative tendencies of the
Nation’s rulers,” the statement said.
“In the course of scuttling the people’s revolt, some of these Labour
leaders got appointed into some dodgy committees that were not primed
to achieve result. This is why we view this call by the Labour leaders
for Sanusi’s sack as a cheap, opportunistic (albeit languid) ploy to
crawl back to the people’s reckoning.”
It warned that responsible leadership is about selflessness and
consistency, and advised Nigeria’s labour leaders to critically examine
the policies of governments nationwide which impinge on the well-being
of the people “instead of looking for scape-goat for cheap populism.”
The Central Bank of Nigeria has said that it has
recovered and returned to customers a total of N5bn wrongfully taken from
depositors by banks operating in the country. It also said it would focus on
the protection of consumers of products being brought to the market by banks
over the next three years,.
The Deputy Governor, Financial Services, CBN, Dr.
Kingsley Moghalu, told the Senate Committee on Banking, Insurance and other
Financial Institutions on Tuesday, that there had been a crisis of confidence
between banks and their customers regarding charges on deposits.
He said, “In the next few years, between now and 2015, we
will be focusing on consumer protection. There are ranges of bank charges that
are acceptable.
“As I speak to you, we have recovered from the banks N5bn
as wrong charges, which have been returned to Nigerians.”
He said CBN was also focusing on data integrity from the
banks, financial stability, disclosure, transparency, corporate governance and
risk management. Moghalu said that although some stability had been achieved as
a result of the reforms in the banking sector, CBN was taking measures to
ensure that the gains of the reforms were not reversed. He justified a recent
circular that put embargo on further lending to bank debtors, who owed about
$5bn, saying there were indications that financial indiscipline was rearing its
ugly head again.
“They will not be allowed to borrow until they start
paying their debts. This is to ensure that the gains from the reforms were not
reversed,” he said.
Moghalu also explained the economics of high interest
rates, arguing that it was necessary to keep inflation at a stable rate, while
sustaining the value of the naira.
According to him, the reforms are not a destination, but
a process that will continue so as to save the country from the effects of the global
financial crisis. The committee sought clarifications on the various
intervention funds operated by the CBN, expressing concerns that the
agriculture sector was receiving little of the funds, in spite of the fact that
it was crucial to the national economy. Moghalu, however, explained that the
intervention funds were meant to stimulate the economy and mop up excess
liquidity.
Central Bank of Nigeria, CBN, Thursday directed banks to
accept the voters’ card issued by Independent National Electoral Commission,
INEC, as means of identification. The directive was given via a circular titled
“Inclusion of Independent National Electoral Commission, INEC, voter’s
registration card as a means of customer identification”.
The circular said: “Further to our circular on anti-money
laundering/counter financing terrorism (AML/CFT), Regulation 2009 on acceptable
means of identification for the purpose of account opening and transaction of
banking business in Nigeria, it has become necessary as a result of the need to
enhance financial inclusion, to extend the acceptable identification options.
“Accordingly, all banks and other financial institutions
are hereby advised to accept INEC Voter’s Registration Card duly issued by
INEC, bearing the holder’s particulars such as name, photograph, date of birth
and address as a valid additional means of identification of natural persons
for the purpose of conducting banking business in Nigeria.”
In another development, the CBN has commenced measures
for banks to have a common account opening procedure. The apex bank yesterday
issued a draft documents for account opening by individuals and corporate bodies.
The draft document was communicated to banks via a circular titled, Account
Opening Forms. It stated that, “the absence of uniformity in account opening
procedure and documentation for prospective customers has continued to hinder
the effectiveness·of KYC requirement in banks and other financial institutions
in Nigeria.
“The adverse implication of this on the fight against
money laundering and combating of financing of terrorism cannot be
overemphasized. The CBN, in conjunction with the Committee of Chief Compliance
Officers of Banks in Nigeria, CCCOBIN, has therefore developed draft uniform
account opening forms for adoption by banks and other financial institution”.
In a move aimed at recovery, strengthening financial stability and instilling
discipline in the banking sector, the Central Bank of Nigeria (CBN) has
barred banks in the country from extending further credit and loans to 113
companies and 419 directors/shareholders, including those belonging to
Mr. Femi Otedola, Alhaji Sayyu Dantata, Sir Johnson Arumemi-Ikhide,
former Power Minister, Prof. Bart Nnaji, Mrs Elizabeth Ebi and Dr. Wale
Babalakin. Cross River, Kwara, Zamfara State Governments also affected
The CBN arrived at this decision as a result of the reluctance by the
debtors to pay back their loans despite the purchase of the debts at an
agreed price by the Asset Management Corporation of Nigeria (AMCON).
In a new circular dated September 17, and obtained exclusively by
THISDAY, the central bank stated that the restriction would apply to
individuals, organisations, companies as well as principal shareholders
and directors of companies where the outstanding value of loans
purchased by AMCON amounted to N5 billion or above as at the day of
purchase, without regard to the actual amount paid by AMCON.
The circular, which was signed by CBN’s Director, Banking Supervision,
Mrs. A. O. Martins, stated that “it has become necessary to stop debtors
who failed to repay their loans to banks and had these loans
subsequently transferred to AMCON, from further enjoying credit
facilities from Deposit Money Banks (DMBs) until they fully repay agreed
outstandings to AMCON.” These credits must be recovered.
The circular, which was accompanied by a detailed list of the
blacklisted debtors, showed that worst hit by the directive are Zenon
Petroleum, owned by Otedola, which was indebted to banks to the tune of
N192.4 billion; MRS Holdings Limited, which belongs to Dantata –
N119.98 billion; Seawolf Limited – N98.32 billion; Arik Air Limited,
belonging to Arumemi-Ikhide – N85.481 billion; NITEL Plc/M-Tel –
N71.547 billion; and Capital Oil and Gas Limited, which belongs to
Ifeanyi Ubah – N48.014 billion.
Others include Falcon Securities, whose Managing Director, Mr. Peter
Ololo, was arraigned alongside several bank executives in 2009 by the
Economic and Financial Crimes Commission (EFCC) – N162.9 billion;
Rockson Engineering Limited, owned by Arumemi-Ikhide – N60.475 billion;
BGL Securities – N6.44 billion; Rahamaniyya Oil & Gas Limited –
N46.38 billion; Bi-Courtney Limited – N20.214 billion; and Geometrics
Engineering, owned by Nnaji – N19.76 billion.
The restriction also applies to: Aero Contractors Company, owned by the
family of Olorogun Michael Ibru - N32.579 billion; Tinapa Business
Resort – N18.509 billion; Nestoil Limited, belonging to oil and gas
entrepreneur, Ernest Azudialu – N13.506 billion; Dorman Long Engineering
– N9.667 billion; Ascott Offshore Nig. Ltd, belonging to former banker,
Henry Imasekha and the Berkley Group – N64.728 billion; Gitto
Constuzioni – N11.838 billion; and Dansa Foods – N14.880 billion, whose
directors, Sani and Abdul Dangote, are the brothers of business mogul,
Alhaji Aliko Dangote.
Commercial banks were also directed not to grant further credit to
Cross River and Zamfara States because of the failure of the Tinapa
Business Resort and Accountant General, Ministry of Finance, Zamfara to
pay back loans collected respectively.
The restriction, according to the central bank, came into effect from
the date of the circular and shall remain “until full liquidation of
agreed indebtedness to AMCON”.
For Zenon Petroleum whose initial debt of N192.423 billion was priced
by AMCON at N140.999 billion, the memo showed that “negotiations are
ongoing and with fairly clear roadmap”. It also revealed that MRS
Holdings’ debt of N119.986 billion, acquired by AMCON at a price of
N91.620 billion has been “restructured and is performing”.
Similarly, while the remark on Seawolf’s debt of N98.328 billion that
AMCON priced at N88.496 billion was put at “negotiations ongoing,” it
showed also that Arik Air’s debt of N85.481 billion which was acquired
by AMCON at N62.970 billion has been “restored but there is a
moratorium”.
It also showed that while Capital Oil and Gas’ N48.014 billion has been
“restructured and awaiting performance,” Rockson’s debt of N60.475
billion, which was acquired by AMCON at N36.331 billion, is still
“pending”.
To ensure compliance, the CBN warned that any bank that flouts the
guidelines would be made to make an immediate provision of 100 per cent
of total principal and interest outstanding in the account of the
customer and related parties, in addition to whatever regulatory
penalties the CBN may decide to impose.
Opponents of the N5000 banknote may have lost the battle,
it emerged yesterday. Minister of Planning, Shamsudeen Usman, who spoke to
journalists at the meeting of the Economic Management Team on Tuesday said that
President Goodluck Jonathan had approved the proposal to print the N5000
denomination. He added that government would push ahead with the printing.
“The discussion today (Tuesday) was basically to
endorse(the introduction of N5000 note). Mr. President had already approved and
that is the only requirement by law. The CBN (Central Bank of Nigeria) is to
propose and Mr. President is to approve,” he said.
Jonathan presided over the EMT meeting which has Alhaji
Aliko Dangote, Mr. Femi Otedola, Mr. Atedo Peterside, Mr. Aigboje
Aig-Imoukhuede and other top government officials as members.
Denomination of
controversy
The CBN governor, Lamido Sanusi, penultimate Thursday
announced a proposed comprehensive review of the nation’s currency with the
highlight been the introduction of the N5000 note and conversion to coins the
present N5, N10 and N20 notes. But Nigerians, especially economists, have
argued that the introduction of the note would lead to inflation in the system.
Just on Tuesday, about 500 protesters led by a former
member of the House of Representatives, Dino Melaye, demonstrated in front of
the CBN office in Abuja against the N5000 note. Melaye, the leader of the
placard-carrying protesters, said the proposed N5000 note would send a wrong
signal about the worth of the Naira.
Lagos-based lawyer, Femi Falana, has also written to the
Attorney-General of the Federation, Mohammed Adoke, to use his office to stop
the CBN from introducing the N5000 note. But Usman said there was no
correlation between higher notes and corruption and that it did not contradict
the CBN’s cash-lite policy.
No inflation,
corruption
He said, “Clearly the N5000 notes, unlike some people
misrepresent it, is not going to lead to higher inflation. There is absolutely
no link. I am an economist, and I have been Deputy Governor, Operations of the
Central Bank.
“The last review of the introduction of N1000 note and
the various coins, I was deeply involved. It was my responsibility at the
Central Bank, there is absolutely no link between inflation and the currency
denomination.” On the contradiction between higher denominations and the CBN
cashless policy, the minister said “It is not in variance. The Euro has the
€500 note. If you go to the countries where the Euro is in use, you will not
get the €500 note in normal circulation. But it is used by the banks and a few
other heavy cash users to store higher value.
“I have been in parts of the United States where you draw
the $100 bill and give it to somebody and they start looking at it as if it is
something strange, they probably have not seen it. “So the higher denominations
are there to create higher value, they will not be in the widest of
circulation. And I think what is important is that there is no link between it
and inflation.”
“I think people alleged that corruption is being done in
dollars. A $100 bill is N16, 000; N5000 note will be $30, so which one is
bigger to carry if you are doing corruption? “So I don’t think it is
necessarily going to increase the level of corruption. Those doing corruption
will probably find that too small, the $100 bill is still bigger than the N5000
note,” he added. He said the current lower currency notes would run
concurrently with their coin versions when introduced.
Usman, however, faulted Sanusi’s handling of the message
to Nigerians on the currency review. “I think even that aspect didn’t come out
well. So, the CBN is going to communicate to Nigerians that the coins will run
concurrently with the note. They are like testing the waters, if they get
accepted and are being utilised, only then will they take subsequent actions,”
he explained.
N10000 note?
While supporting the planned introduction of the N5000
notes, Peterside said if he was the CBN governor, he would have even gone ahead
to introduce a N10000 note. He argued that the country would save huge money
whenever it printed bigger denominations. He said, “If I were the CBN Governor,
I would prefer to print N10000 notes.
“Last year, Nigeria spent N47bn to print these small
notes. If we were printing bigger denominations, we will print a fewer number
and make phenomenal savings. “Secondly, money is a store of value; all these
thieves, rogues and vagabonds running around in various states and all over the
country, when they steal money, they will want to keep it outside the banking
system.
“So they need a higher denomination notes. Right now,
they are using the $100 notes all over Nigeria because they are the best store
of values for them.
“If you give them a better store of value in Nigeria,
they will move away from these dollars and reduce the demand for the $100 notes
and move into our own currency as opposed to the use of $100 notes to hide
their loots and so on.”
Peterside added that the country is currently losing in
two ways by importing US dollars to finance the activities of corrupt persons
and (by) squandering scarce resources printing large volumes of “worthless
notes.”
N5000 to protect
economy
Dangote also held the view that the introduction of the
N5000 notes would not cause inflation but would rather protect the economy. “People
are saying that Central Bank is going to spend N40bn on the new notes. Of
course, last year when you look at the budget, they spent N47bn to print
currencies, so it is not different at all,” he said.
Aig-Imoukhuede on his part said the negative reactions
that had trailed the planned introduction of the N5000 notes were unfortunate.He
said legal tender and restructuring of currency are normal parts of the CBN’s
functions. He said, “In the case of Nigeria, our economy is such that a N5000
note which is in effect a $30note is not strange.
“The greatest argument I have heard about it is that the
introduction will cause inflation. The other argument is that it will cost
money to introduce the new note.
“There is no relationship between the issuance of higher
legal tender and inflation. It is unfortunate that some people have misled
Nigerians into thinking that it will lead into higher inflation.
“Every Central Bank, by the nature of currency
management, will issue new notes all the time, so printing of notes is an
ongoing operation that every Central Bank engages in.
“As you are introducing N5,000 notes, you print less of
N1,000 and N500 notes. It is not going to add to the cost of printing, it is
going to basically fall into your normal annual budget for printing.”
Protest
The Melaye-led protesters complained that the currency
restructuring that would lead to the conversion of N20, N10 and N5 notes into
coins would eliminate the contributions of nationalists like Tafawa Balewa,
Alvan Ikoku and Murtala Muhammed, whose photographs grace the notes. Some of
the placards carried by them had inscriptions like, “Sanusi is wicked”, “Sanusi
must go”, “Nigerians say no to Sanusi’s crooked notes”, and “Nigerians reject
the wicked N5000 notes”, among others.
According to Melaye, the CBN’s action will send a wrong
signal to the world that the Naira value is so weak that more of it is needed
to transact businesses.
He said, “The implication of the N5000 notes on the
economy is serious. The policy is unnecessary and will serve no useful purpose.
We have more socioeconomic challenges than restructuring currency at the
moment.
“The United States, which is the strongest economy in the
world, has $100 as its highest denomination in circulation. The UK largest
denomination of the pound sterling ever printed for circulation was the £1000
note issued between 1725 and 1745. The £100 note was issued from 1725 to 1943
and was withdrawn in 1945. Since then the £50 note has remain the largest
denomination of the British pound in circulation. Saudi Arabia 500 Riyals is
its highest denomination.”
The CBN’s Deputy Governor (Operation), Mr. Tunde Lemo and
other officials of the apex bank, including its Director (Corporate
Communications), Mr. Ugochukwu Okoroafor, addressed the protesters.
Lemo said, “The most important task of CBN is to fight
inflation because inflation hurts the masses more than anybody else. I am yet
to read your paper but we will go through it. Let me tell you, for the
leadership of CBN led by Mallam Sanusi Lamido Sanusi and his colleagues, we are
interested in ensuring that the masses of this country are well taken care of.
“But let me debunk something that I have read in the
Newspapers, we are not spending N40bn to print N5000 note. Whether we introduce
N5000 note or not, every year, we print money and whatever we decide to do, it
is to make sure that we reduce cost of printing money.
“Anything we do, we make sure we reduce the cost of
printing money. I can assure you that we are sensitive to the masses and we are
sensitive to the people of the Federal Republic of Nigeria. We will look at all
the issues and respond.”
The trademark patent right of the naira notes in circulation is owned by
non-Nigerians, the Central Bank of Nigeria (CBN) has revealed. The
apex bank yesterday cited this as one of the reasons it wants to
redesign the naira notes. According to the director of corporate
communications of the CBN, Mr Ugochukwu Okoroafor, “it was quite
shocking to us when we discovered that the patent rights of some of our
notes are owned by non-Nigerians.”
Okoroafor, who spoke with
financial journalists in Lagos yesterday, said it is not right or safe
for a sovereign state such as Nigeria to have the patent right of its
legal tender owned by a foreigner. “It is dangerous for us as a nation
because they can hold us at the neck with it,” he stated. He however
noted that the patent rights of the new designs of the naira would be
owned fully by Nigerians, adding that this was one of the crucial
reasons the CBN wants to restructure the naira.
Okoroafor also
debunked reports that the apex bank would be spending N40 billion in the
printing of the controversial N5,000 notes as well as that of the
redesigned notes. According to him, “it is an absolute lie and it is
quite outrageous.” Stating that people who are making such claims
should check their facts correctly, he said “the CBN does not hide how
much it spends on note printing annually. It is there in our annual
reports, so people who are making such outrageous claims should go and
check our annual report which is a public document.”
He said due to
the false information that is being proliferated, the CBN had decided to
publish the amount it has been spending on note printing as well as
what it would spend in printing the new currencies. He further stated
that, rather, the apex bank would be saving N7 billion from the
printing of notes annually through its “Project Cure”, as it is cheaper
to print, store and transport larger bills. Defending the
introduction of the N5,000 note, he said it is meant to serve big
transactions, noting that it is not meant for everyday or minor
transactions. He also reiteratedthat it would in no way increase
inflation rate in the country as more money would not be injected into
the system.
He stressed that the market forces would determine its
use, citing the American $1,000 and $10,000 notes which he said are used
only for special transactions. Mazi Okechukwu Unegbu, former
president, Chartered Institute of Bankers of Nigeria, said it is not the
standard practice to have the patents of national currency held by
foreigners. It is because Nigeria lacks the technology and trained
personnel to manage its own printing. It is dangerous because if we have
to get it back we will pay heavily.
However, he said, it was not
enough reason to justify the currency restructure and printing of
N5,000 note. “CBN should have first come out with policy to make coins
acceptable such as increasing their values before considering its
current policy which in itself is contradictory of other policies of the
CBN.”
The Senate, yesterday, warned the
Governor of Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi,
to, as a matter of urgency, stop his proposed introduction of N5,000
denomination. Chairman, Senate Committee on
Banking, Insurance and other Financial Institutions, Senator Bassey Edet
Otu, said that it had become imperative for Senate to put a halt to the
new CBN arrangement because a project of this kind required
parliamentary approval, adding that the upper legislative chamber was
never briefed prior to the announcement of the soon-to-be introduced
note.
Senator Otu warned the CBN to be very careful in
taking some decisions that would worsen the nation’s economy and send
wrong signal that Nigeria’s currency was valueless. He stressed that the
country did not deserve this policy since the nation was not in a major
crisis. According to him, “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.
“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.
It has been alleged that the Central Bank of Nigeria (CBN) will spend
about N40.3billion to produce its new coins and Naira notes.
Out of the amount, N11.8billion will be spent on the new N20, N10 and N5 coins. “The bank is spending over N40billion on the production of new coins and notes.” a member of the board of the CBN disclosed
“The N40billion is the total sum for the production of the coins and the
new notes” stated the CBN Board member, who does not want to
identified statedthe board member added. According to the source, the CBN, at its board meeting two months ago
decided that most of the new notes and coins would be printed by the
Nigerian Security Printing and Minting Company.
The meeting agreed that only the N5,000 note would be printed by a
foreign firm which had “the technology and the capacity to handle the
sensitive features in it.” The CBN had on Thursday announced a comprehensive review of the
country’s currency called Project Cure. The apex bank annonuced that it
will be introducing the N5,000 note as the highest denomination by 2013,
while N5, N10 and N20 notes will be coverted to coins. The new coins will join the 50k, N1 and N2 coins already in existence but which Nigerians hardly use.
The source further revealed that some workers of the CBN would be laid off during a forthcoming retrenchment exercise. The CBN Board member who does not want to identified stated “consultants
are already meeting with the various departments to select five to 10
percent of members of staff to be laid off.” “They are doing this in the pretext of normalising staff aggregated
appraisal graph through the Head of Departments. The HODs are the ones
who determine who to go in their directorates. They are doing it under
the pretext that it would be used to categorise staff for productivity
bonus payment.”
The CBN governor, Mr.Lamido Sanusi, at the press conference, where he
announced the new structure of the Naira, had declined to give the cost
of printing the currency. He said that the cost would be seen in the CBN’s balance sheet at the end of the year.
The new N5,000 note which is to be introduced is not going to feature
the face of Late President Yar'Adua like we all heard but, according to
CBN, The faces of three prominent Nigerian female activists are to be
used on the new note.
They are those of
late politician and social mobiliser, Margaret Ekpo (1914 – 2006);
late politician and activist Hajia Gambo Sawaba (1933 – 2001)
late politician and women’s right activist Funmilayo Kuti (1900 -1978).
Addressing journalists in Abuja, the governor of the CBN, Sanusi Lamido
said that the plan is aimed at enhancing the quality of banknotes,
incorporate a more effective feature for the visually impaired as well
as reduce cost of production, distribution and disposal of banknotes.
He said that under the new structure, N5, N10 and N20 notes will be
coined while N50, N100, N200, N500 and N1, 000 will be redesigned with
new security features.
Sometimes I wonder these people are really living in the same Nigeria with the common masses, but then they are not. They live in Aso Rock while the masses live in Nigeria. What is the benefit of this to the common man on the street with no electricity, roads, water, etc?
