September 19, 2012 by John Ameh and Oluwole Josiah
Senate President, David Mark and Speaker, House of Representatives, Aminu Tambuwal
| credits: File copy
| credits: File copy
The National Assembly on Tuesday passed
different resolutions asking President Goodluck Jonathan to stop the
Central Bank of Nigeria from introducing its controversial N5000 note.
Members of both the Senate and the House
of Representatives resumed from their recesses on Tuesday with the
controversial plan by the CBN taking the front burner.
While the Senate unanimously adopted a
motion urging “The President and to direct the CBN to stop all actions
on the issuance of the proposed N5000 note and all matters connected
therewith,” the House members directed the apex bank to put the plan
on hold for four weeks.
The House also queried the legality of
Jonathan’s Economic Management Committee and its competence in approving
the currency review plan.
When The PUNCH sought the reaction of the CBN governor, Lamido Sanusi, to the development, he said, “I have no comment.”
CBN action illegal
The Senators said the CBN’s plan to
introduce the N5000 note was illegal because Section 4(1 and 2) of the
1999 Constitution and Section 8(2) of the CBN Act of 2007 require the
National Assembly to be part of the process of introducing a new
currency review.
The resolution arose from a motion by
Senator Ita Enang (Akwa Ibom North), asking Sanusi to halt action on
the proposed currency.
Leading the debate on the motion, Enang
said the Senate was aware of section 18 of the CBN Act, 2007, which
conferred on the bank, the power to arrange for the printing of the
currency notes and minting of coins among others.
He said the Senate was also aware of
section 19 of the Act which allowed the bank to issue denominations and
fractions with the approval of the President on the recommendation of
the board.
He said, “The power being granted by the
Legislature is subject to the supervisory powers of the Legislature
which granted or donated the powers under the Act if the exercise of the
powers is contrary to good economic conscience and the wellbeing of the
people and the national economy.
“The introduction of the said N5000 note
and the withdrawal of notes, conversion of some to coins and general
redenomination of the naira has the ultimate effect of devaluing the
naira, making lower currencies to be coined, almost non-value monies for
transactions and subtly yield to the off-demand of certain
international financial institutions for the devaluation of our
currency.
“Section 4(1 and 2) of the constitution
vests the legislative powers of the Federal Republic of Nigeria in the
National Assembly to make laws for the peace and good governance of the
federation or any part thereof; whereas this policy of the bank on the
Naira may not lead to good economic and monetary governance of Nigeria
requiring re-examination by the legislature.”
N5000 negates cashless policy
Enang also said that the currency plan negated the the newly introduced cashless transaction policy.
“In cashless economies, high bills or
currency notes such as the proposed N5000 is not required as
transactions are conducted from the payer to the payee’s accounts
without any need for physical exchange or handling of cash by any of the
parties.
“The convenience of carrying large
amount of cash by way of large denominations now being proposed does not
at all arise since large volume transactions as under the Money
Laundering Act are to be conducted cashless through bank accounts of the
transacting parties.”
Unacceptable to Nigerians
Also speaking, Deputy Leader of the
Senate, Abdul Ningi, described the policy as unacceptable to Nigerians
and ruled out the need for a public hearing since Nigerians had spoken
their minds on the matter very clearly.
Senator Kabiru Gamawa painted a complex
picture of what obtained in his senatorial district, saying that at the
moment, transactions in N1000 notes are difficult as locals prefer to
use other notes.
“We have those who do not accept the N1000 notes in my constituency right now, how much more N5000,” he said.
Chairman of the Senate Committee on
Banking, Insurance and other Financial Institutions, Senator Bassey Otu,
explained that in embarking on a major currency review, the CBN ought
to have consulted with the National Assembly.
He said the new policy was suggestive
of a serious problem in the nation’s currency stability and added that
the “woeful failure of coinage in 2005 should be a lesson.”
I was not briefed – Mark
President of the Senate, David Mark, said he was not briefed about the proposed currency review.
Mark said, “If Nigerians say that they
don’t want anything, I think they deserve to be listened to. I have
listened to the arguments of those supporting it. Their arguments are
not convincing. They are theoretical and do not address the problems in
practical terms.
“The disadvantages of introducing the
N5000 far outweigh that of not introducing it. There is no urgent need
for us to take this now.”
However, Senator Bashiru Lado,said he had wanted to reject the motion, but superior arguments on floor changed his position.
He said the CBN Governor should be given
a fair hearing through the conduct of a public hearing. His request for
a public hearing was rejected by a voice vote.
Stop further action
In the House, members mandated the
Committee on Banking and Currency to investigate the “planned
restructuring of the nation’s currency by the CBN” and submit the
report of its finding within four weeks.
Lawmakers therefore directed the CBN to stop further actions on the proposal pending the outcome of the investigation.
In its resolution, which was unanimously
endorsed by members, the House also directed the Committee on Banking
and Currency to immediately propose an amendment to the CBN Act. The
amendment provide that the apex bank must seek the approval of the
National Assembly before the bank could take any decisions on currency
denominations.
The motion was sponsored by the Chairman, House Committee on Rules/Business, Mr. Albert Sam-Tsokwa, and 20 other members.
Bank’s arrogance
Leading debate on the matter, Sam-Tsokwa
expressed surprise at the “arrogance” of the apex bank in the handling
of the proposal “in spite of the fact that majority of Nigerians are
against it.”
Sam-Tsokwa admitted that though the bank
had “awesome” powers under its Act, the House expected it to exercise
such powers “in circumspect and to the best interest of good governance
of the country.”
He stated that it was difficult to convince Nigerians that the N5000 note would complement the cashless policy.
What’s EMT?
Supporting the views of Sam-Tsokwa, the
Minority Leader, Mr. Femi Gbajabiamila, observed that “a body unknown to
law, the Economic Management Team,” had approved the N5000 note.
He added, “This body is said to have
approved the introduction of this note (N5000). The EMT was created by
presidential fiat and it has no legal status.
“Under the 1999 Constitution, we all
know that it is only the National Economic Council that is empowered to
advise the President on economic matters.
“Now, the EMT has taken over the duty of the NEC. I have not heard that the NEC met to discuss the N5000 denomination.
“I call on Mr. President to convene a meeting of this council and table this issue for deliberations.”
He observed that the National Assembly
boxed itself to a corner when it “delegated” its power to determine
currency denomination to the CBN.
Deceitful economists
The Chairman, House Committee on Power,
Mr. Patrick Ikhariale, accused government of relying on the analyses of
“so-called economists” to endorse the CBN proposal.
“These people are misleading Nigerians by comparing this policy with the case of the United States.
“But, they fail to tell the truth that in the US, only the $100 bill has been used in transactions since 1969.
“Any attempt to allow the N5000 note into our economy will lead to genocide and economic sabotage,” Ikhariale stated.
SOURCE: The Punch - Nigeria's Most Widely Read Newspaper19 September 2012.
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