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olawa20 (m)
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I belong to the school of thought that believes that Yaradua is executing a nothern Agenda.
must we always resort to tribal arguments. I think it is overzealousness on the part of the justice minister. i can hardly understand what his motives are at the moment. don't forget there were rumors also that the minister of finance who was formerly a deputy govervor in the central bank was not in good terms with soludo. this was reported by some dailies even before this policy reversal. if the motive isgood, the method was a bad one. why make an announcement before u inform the persons involved. a CBN governor is expected to be someone who know his onions and usually there is minimum if any form of interference in policy implementation from the government. like someone rightly pointed out, can such a treatment b meted out to a Bernanke. |
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redsun (m)
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The strength of any currency depends on its relevance.Productivity.You got to have a pulling power to be able to make decisions.
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BlackMamba (m)
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He even made a blunder about 2 months ago, when he was question about 42 billion we had in reserve by the national assembly. He said 7 billion out of that money belongs to the federal govt, and the remainder belongs to the CBN. Who owns the CBN,??? People like you wonder why the federal government haven't orders CBN to print more money. |
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IG
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Hey, guys. Let's not rush to conclusions. Many of us (including me) are not economists but we talk as if we are experts in the field. From my layman's perspective I welcomed the idea of redenomination, but we should also remember that that will not increase the purchasing power of the naira. Let's look at it like this; What used to be 100 naira will suddenly become 1 naira If your salary is Fifty thousand naira (N50,000) it will become Five Hundred Naira (N500) The redenomination will not make getting N1 any easier than getting N100 of now. My fear is that traders will hike prices after the redenomination which will make the naira weaker than it is now. Despite my support for the move, I was a little skeptical about it. This is because I know Soludo as an advocate of allowing economic forces to determine the exchange rate of the naira why the sudden change of heart. Was is not the same Soludo that insisted on printing higher Naira denominations ?. One thing I lately learned is that apart from the redenomination, there is a somewhat secret move of fixing the naira exhange rate against the dollar. Now we all know that the dollar is getting weaker and weaker everyday. Fixing our naira against the dollar will make it slide downwards with the dollar against other foreign currencies which is not what we want. I believe this article will be interesting to some of us http://allafrica.com/stories/200708220802.htmlNow for some of us that are saying that soludo has perfomed wonders by making the naira value appreciate. We shouldn't forget that during Abacha days the Naira to dollar exchange is: N22 = 1 dollar (Official) N82 = 1 dollar (Parallel Market) Soludo has done well with the bank consolidation but I think it's too early to Judge his latest move. |
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Guk
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We are in real trouble with this our new Minister of Justice who seems to be more interested in bringing out "Fine Prints" only when its suits them. Yes, Soludo made a technical mistake by not doing whatever you claimed he didnt do but you make a bigger nonsense of the whole thing by suspending it on technical grounds. Are they saying that, if he now seeks approval, he would be given a go ahead? If so, why wasnt it handled internally? They neednt have washed their dirty linen in public. Its all about giving a Dog a Bad Name to hang it. Unfortunately, this had been previously predicted. 17/08/07Naira: Removing the zeros By Reuben Abati "Do you know what is likely to happen?" "What?" "Either of two things. One, the Economic Management Team can look at the proposal and throw it out. Which would mean that Soludo has to resign his position immediately. Or two, the proposal could be accepted but modified in such a form that even Soludo would not be able to recognise it. In which case, he'D be frustrated out." "You have left out a third possibility. The Federal Government could accept the proposal wholesale. In which case, Soludo will become a hero." "And if he loses out in what I think has become a power game., what will he do?" "That has nothing to do with his vision. It will be on record that he recommended the revaluation of the Naira. And I insist that it is a good idea. This is something he should have done a long time ago, in fact since 1999." "He was not the CBN Governor in 1999." "Okay, since 2003." "But he says this is the second part of the reform agenda, beginning with the consolidation of banks, payment systems reforms, the strengthening of institutional framework." Read the full article here: http://www.nigeriavillagesquare.com/articles/reuben-abati/naira-removing-the-zeros-2.html |
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vigasimple (m)
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I agree with IG and to the extract from The sun by SEUN.
I have make the same replies on another similar thread.
This a big gaffe by SOLUDO, a brilliant CBN governor of modern times if not of all times.
However, He seem to have make a mistake on this one, his consulation process is flawed as well as his thinking.
Even on economics terms, we don't have a viable infrastructes in the country to sutain such measures. Our economy is still relying primarily on Crude oil in which we don't even refine our own oil and waste gas which we could have used for electricity and other things.
Secondly, the economy is supported by the politicians who are going to be giving directions, so SOLUDO even if he has power under the CBN Act should know that consulation with Finance ministers, Banks, and the President is a must so that he carries the majority of the stakesholders along.
Nigerians on the other hand with our way of thinking, will made the programm to be a devaluation in the other way round as they will start to increase prices because they will see 1naira instead of former 1000naira and even from a small increase from 1naira to 11Naira will amount to 10% price infaltion , and i can bet 200% nigerians will do that. Within a year there will be at least 20-50% price based inflation.
In short, nigerians are used to this thousand and millions mentality and even banks are talking about Billions and Trillions and we may need time to re adjust our psychic.
I have said it before, again and I will say it again SOLUDO got this wrong and will need to be reprimanded gently and let him get on with his Job.
Anything that is major to affect the nations economy, he should be humbly enough to discuss it with Economic team, Finance Minister and ultimately with the President, infact some of it may have to be debated in both Houses of Parliament, i.e the Assembly and the Senate.
May God continue to bless us and Nigeria and grant us more wisdom.
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PTH (m)
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Welcome to life saddled with the northern Nigerian albatross.
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Seun (m)
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19. Denomination and form of currency notes and coins.
(1) Currency notes and coins issued by the Bank shall be -
(a) is such denominations of the naira or fractions thereof as shall be approved
by the President on the recommendation of the Board.
(b) of such forms and designs and bear such devices as shall be approved by the
President on the recommendation of the Board.
(2) The standard weights and composition of coins issued by the Bank and the
amount of remedy and variation shall be determined by the President on the
recommendation of the Board. It doesn't appear as if the president has the explicit right to stop the CBN governor, but he cannot fully execute his plan without the president's approval, because he will eventually have to produce new naira notes and coins, and the president has a veto on that. The people who drafted the law obviously did not consider the possibility of re-denomination, so they did not explicitly include it in the law. |
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obong (m)
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its their contention that he never got th approval of the president. I'm sure he did, thats why they were claiming it should have been in writing. but the law is clear that writing was not required so they are shifting their position.
Why I halted Soludo –Yar’Adua
By IHUOMA CHIDOZIE
Published: Sunday, 26 Aug 2007
President Umaru Yar’Adua on Saturday clarified why he ordered the suspension of the re-denomination of the naira.
Skip to next paragraph
click to expand image
Photo File
CBN Governor, Prof. Chukwuma Soludo
The President said his decision to halt the Governor of Central Bank of Nigeria, Prof. Charles Soludo, was informed by the fact that he lacked the power over such matter.
Yar’Adua stated his position on the new naira policy in a statement by his Special Adviser on Media, Mr. Olusegun Adeniyi.
Citing relevant sections of the CBN Act to substantiate his position, Yar’Adua said only the President of the country had the power to re-denominate the naira.
The Federal Government, through the Minister of Justice and Attorney General of the Federation, Mr. Michael Aondoakaa, announced the suspension on Friday.
The minister had hinged the government action on the claim that the governor of the apex bank contravened the CBN Act.
The President’s explanation came amidst indications that the CBN Governor may be forced to resign, or be removed, following his decision to implement the strategic agenda without Yar’Adua’s approval.
Yar’Adua believed that the economic benefits of the policy to the nation “was doubtful.”
The President explained that he had earlier directed the Attorney-General and Minister of Justice to review all the Acts of the National Assembly passed within the last days of the Obasanjo administration, including the CBN Act.
He explained that he had raised some concerns on the new naira policy when Soludo briefed the Federal Executive Council.
According to the President, the Economic Management Team was, therefore, mandated to address the concerns he raised on the matter.
The statement reads, “In his last week in office, President Olusegun Obasanjo signed into law several bills targeted at institutional reforms. One of them, the Central Bank of Nigeria Act 2007 was gazetted on June 1, three days after President Umaru Musa Yar’Adua assumed office.
“Following the constitution of the Federal Executive Council last month, President Yar’Adua directed the Attorney General to assess all the Acts of National Assembly, especially the ones yet to be fully operational, and study them critically.
“While this was going on, the Central Bank Governor, Prof Chukwuma Soludo, addressed the media on the decision by the CBN Board to re-denominate the Naira purportedly in line with the powers granted him by CBN Act 2007.
“The next day, he came to brief the Federal Executive Council on the policy and made it clear that he was merely informing Council members and not seeking any approval since he was acting in line with the powers allegedly granted him and the CBN Board by CBN Act 2007.
“While the President was concerned about the implications of the plan on the economy and would have preferred robust consultations with critical stakeholders before the announcement, he chose to await the Attorney-General’s advice on the contents and applications of the law cited by the CBN Governor.
“In the interim, he mandated the Economic Management Team, led by Finance Minister, Dr. Samsudeen Usman, to meet with the CBN to discuss areas of concern including the following:
“1. That under its so called “Strategic Agenda for the Naira” presented to the media, the CBN would abdicate its monetary responsibility by ceding such authority to states and local governments.
“2. That the CBN would, without consultations, set a commencement date of August 1, 2008 for the redenomination of the Naira and the introduction of new Naira notes and coins.
“3. That the CBN apparently had not given due consideration to the huge cost implications of the currency redenomination at a time when there are more urgent demands on the resources available to Government.
“4. That the economic value of the entire project to the nation at this point in time was doubtful.
“However, while reviewing the laws assented to by former President Olusegun Obasanjo in his last days in office, as directed by President Yar’Adua, the Attorney-General discovered that the CBN Act 2007 does not in fact grant Prof. Soludo the powers he claimed with respect to currency denomination.
“Section 19 of the Act clearly states as follows:
“(1)The currency notes and coins issued by the Bank shall be—
“(a) in such denominations of the Naira or fractions thereof as shall be approved by the President on recommendation of the Board; and
“(b) of such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board.
“2. The standard weights and composition of coins issued by the Bank and the amount of remedy and variation shall be determined by the President on the recommendation of the Board.
“What these provisions mean is that only the President can give approval for Naira redenomination if he is satisfied as to its desirability or necessity.
“In the present circumstances, the President is not convinced of the merits of the Naira re-domination plan put forward by the CBN without appropriate regard for the present Administration’s insistence on due process and the rule of law.
“That is why, in exercise of his power as Chief Law Officer of the Federation, and with the approval of the President, the Attorney General announced the suspension of the ‘Strategic Agenda for the Naira’ policy.”
In a related development, it was gathered that the Presidency may take further action on the CBN Governor, apart from the suspension of the naira re-denomination plan.
Sources in the Villa claimed that Soludo’s absence at the inauguration of the Supervisory Board of the Debt Management Office on Thursday was an indication that the Presidency may freeze him out.
Soludo was the only member that was absent from that event.
Moreover, the Minister of Finance, Dr.Shamsudeen Usman, had curiously omitted Soludo’s name when he named members of the Economic Management Team while briefing newsmen after the last FEC meeting.
It was not clear if that omission was a mere slip, or an indication of Soludo’s outright removal from the group.
The CBN Governor was a principal member of the team during the last administration.
Sources in the Villa gave indications that Soludo may be forced to resign, failing which he will be removed.
It was gathered that powerful people in the Presidency felt that his action was an affront to the authority and person of the President.
They argued that, even if the CBN Act made the apex bank autonomous, Soludo should still have consulted the President on such a highly sensitive national policy.
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KnowAll (m)
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[quote:BlackMamba]People like you wonder why the federal government haven't orders CBN to print more money. "look man the whole world knows if u print more it will lead to inflation, so what kind of statement are you making here, even a primary school kids know this. If you have a Central bank governor who does not know it is this-courteous and undiplomatic of him to announce such a momentous agenda without seeking the consent of his president, then obviously his not fit for the job. Been in high position is not all about make u sabi book. I am sure when the ghanians did there own re-denmination, their president was not kept in the dark." |
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PTH (m)
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the illiterate north who depend SOLELY on "revenue sharing" will be the ruination of this country.
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oscar (m)
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This is terrible. Shameful and Sad
But what do you expect with stolen mandate??
It means the government is in taters;
CBN is in another world, Finance ministry in its own world and FG in disarray!
Thats the message sent across the world.
This is another policy sumersault.
Be very afraid of weak-minded rulers.
Wise Nigerians should not expect anything different from this junta.
I can not agree more! it was the most 'unwisest' (if ever there's a word like that )decision by the North-centric Yar'Adua administration. This government is surely not of the people, so what more could we expect? Soludo, to their utter chagrin, is light years ahead of them in everyway they can imagine. they cannot bear to fault his logic and reasoning, that is why they cook up all sorts of rubbish to shoot down a policy that could ultimately have set Nigeria back on the road to total economic recovery. I agree this might be a ploy to cast Soludo in a bad light in order to remove him. It is indeed A BIG SHAME, and a massive drawback for this country.
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ojobayo
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Northern agenda?  ? There might be something there, They love money so much, Anyways. I think Soludo had a good idea but it is ill adviced if the Gov of the land heard it for the first time via news. That is a policy change. Policy changes are a President's legacy, On the other hand, it takes 2/3 of the sentate to fire the Gov of CBN. Here's my take. It cold have being done gradually with a new name to the new Currency. I thought it was really dumb calling it Naira, They could have ran both in parallel and let the old currency run itself out. The truth of the matter is Nigeria will be better served with fewer currency in circulation. This could also be archived with Debit and Credit Card (Bad word in Nigeria) |
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McKren (m)
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Northern agenda? ? There might be something there, They love money so much, Anyways. I think Soludo had a good idea but it is ill adviced if the Gov of the land heard it for the first time via news. That is a policy change. Policy changes are a President's legacy, On the other hand, it takes 2/3 of the sentate to fire the Gov of CBN. Here's my take. It cold have being done gradually with a new name to the new Currency. I thought it was really dumb calling it Naira, They could have ran both in parallel and let the old currency run itself out.
The truth of the matter is Nigeria will be better served with fewer currency in circulation. This could also be archived with Debit and Credit Card (Bad word in Nigeria) That is a very brilliant suggestion, may be you send this through e-mail to the CBN. |
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ilugunboy (m)
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Nothing is going to convince me that Yar'dua was in the dark about such a major policy thrust.
Politicians and people with scores to settle are just taking advantange of his lack of knowledge of fundamentals of monetary policies and the man is exposing his ignorance. With policy somersault like this one, i doubt whether he is
the best man for the job. Remember not long ago, this government reversed itself as to the powers of the EFCC within 48 hours!.
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fojames (m)
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Why Am I not surprised? The NAija FActor at work!
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olrotimi (m)
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good for soludo with his big mouth.abeg let them sack him before he resigns.
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hayo (m)
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I am sure Soludo has good motives but did not follow good project management methodologies.
If a project manager was involved in this re denomination process - he would have done a proper stakeholder analysis and identified that the sponsor should have been the President of the Federal Republic of Nigeria. If the president signed the charter to start the project, he would not come out later to stop it. Soludo is smart, but we have to start using best practices in order to avoid occurrences like this.
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KnowAll (m)
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The man soludo might have poltical ambitions. It is a fact that nobody has ever run for president from the south east successeful. He might be the massiah the SE has been waiting for. If this goverment rejects the re-denomination outright without improving other sectors of the economy like roads, electricity, & jobs, soludo may end up becoming a hero in the next electoral dispensation.
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Kashif (m)
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I am sure Soludo has good motives but did not follow good project management methodologies.
If a project manager was involved in this re denomination process - he would have done a proper stakeholder analysis and identified that the sponsor should have been the President of the Federal Republic of Nigeria. If the president signed the charter to start the project, he would not come out later to stop it. Soludo is smart, but we have to start using best practices in order to avoid occurrences like this.
Soludo is an economist, and not a project manager. If you are coming from project management, the the project is still under initialisation and there are many precesses in project initialisation. I find it very difficult to believe that Soludo kept mr president, who is a major stakeholder/sponsor in the dark, no matter what the CBN act 2007 says. I am almost sure he and his team had done good brainstorming before deciding to buy the idea because I learnt the idea was not originally his. Please be aware that this process will not in anyway, improve the purchasing power of the naira. It is a mere mathematical manipulation that will drastically reduce the quantity of the legal tender in circulation thus, relieve many bulk-tellers of their duties and cut the millionaire club membership to size. Surely, it requires very huge financial and logistics muscle which many will be scared to embrace. If the CBN has this redenomination agenda plan in mind before changing the lower bills then, that was a poor life-cylce cost analysis. More are still to come so, lets see whose script mr president is acting out.  |
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flexay
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Soludo needs to take it one step at a time. Yes there must be radical changes before our economy moves to the promised land. But the are two things whose cognizance must be taken fully.
1- Policies must be localized. ie The solutions to economic problems suggested by the IMF and world Bank cannot yield the same results in all countries.
2- The Nigerian populace who will be the practical agents of enforcement of the policy need time to fully know the content and intention of the policy to appreciate it fully.
Soludo, you cannot act as the Boss and the only Financial Guru in the country. Carry us along. We are sensible enough to understand.
We must commend Yar'Adua for feeling the pulse of Nigerians. Thats truly a servant leader.
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KnowAll (m)
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[QUOTE:FLEXAY - W[b]e must commend Yar'Adua for feeling the pulse of Nigerians. Thats truly a servant leader.[/b] Northern elders and rulers were against the redenomination, the day after it was annouce they met up with yardua expressing their fears and feelings. What did we get 1 week after the annocement - redenomination suspended. I have a feeling those malos changing money might be affected by this redenomination exercise, and that will mean a lot of them will be out of a job if $1 is N1.25, you probably we be better of changing it in the banks. |
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Seun (m)
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Let's not tribalize the issue. Yorubas and Igbos also change money. Besides, the issue affects us all equally.
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adetoss
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Dear nigerians,
please lets support the proposal of the CBN governor,it is advantegeous.Those that oppose the motion are the corrupt politician.they don,t want everybody to be the same.think of america as a nation that nigeria wants to be like,they never try to have high denomination.i think their highest denomination is 100$.this morning i received a lot of mail from friends froms 10 different countries saying why are nigerian politician hindering CBN governor and the president to take nigeria to greater height.i could't answer the question.please the president should think that whatever plans that soludo has is a plan that will favour nigerians not those selfish and self centered politician who wants the poor to remain the same.the bible says he that considered the poor blessed is he.or those people want to face the wrath of GOD.
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rati ken (m)
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Am so surprised at the reactions coming from various quarters on this issue. Firstly I can not agree more! it was the most 'unwisest' (if ever there's a word like that )decision by the North-centric Yar'Adua administration. This government is surely not of the people, so what more could we expect? This is a quote from a nigerian. Until we let go our tribalistic conciousness, we might be heading for worse things in this country. Am not hausa, but does it matter if it takes an hausa to get things done?, could we allow the president do his thing, Obj has done his and is out of scene, Yaradua has done nothing evil yet to get these lambasting from all corners on this forum. Maybe nigerians might be happier if his aides, PAs and all were a mixture of different tribes but he has chosen d people to work with, it doesn't matter who they are. What matters now is 'PROJECT NIGERIA' and getting things done right. On the issue of EFCC & Ribadu, People have thrown the present government to the trash can 'of no essence', but i can remember on this forum when people criticized this same Ribadu of being OBJ's hunt dog, witch-hunting everyone that opposed the then incumbent government. Even until recently, the politicians spearheading the crisis in d niger-delta has not been apprehended until the federal government came in. Ribadu has done some little nice jobs but there are more of politics to Ribadu-led EFCC under the OBJ admin. His fancy days might be over and am sure he is not the best person for the job. On the suspension of the Naira-Redomination policy, I just hope this policy dies a natural death from here. I've always urged nigerians to critically examine policies before throwing their weight behind it. I might not be an economist but i've left some posts on this issue I ave been a soludo fan until now, I've keenly watched the economic scenario of this great country and i can tell this forum that this is a wonderful initiative with a wrong timing. This would have been wonderful if Nigeria was running a closed economy or if we were a relatively high producing or manufacturing economy. I have always said from the onset that this is a short cut to solving our economic problems. There are better ways of adding value to the naira than redenominating. The only thing we majorly export in this country now is crude oil, what happened to cocoa, groundnut, coal, our solid minerals, rubber, farm products among others. The government should come up with policies and modalities that will boost some other sectors of the economy which will eventually lead to a high Export to Import ratio which will add value to our curruncy internally and on the foreign scene. Redenomination is not what we need right now. I earn 20000 NGN now to earn 200NGN by Aug 2008 which is of same value does not worth the stress. Consumer right protections has not worked for our petroleum products (PMS, AGO etc) on which could be readily enforced, how much more taxi fare, house rent, meal ticket, petty goods among others if this eventually works. Does it mean that Soludo never thought of this at the inception of the 1000 NGN note as well as the new lower denomination notes & coins knowing fully well that redenomination is priority to our economy in the nearest future? This tells you that there is more to this than have been made public. Anyway, am yet to be convinced of the motive behind this because at the end, nothing happens to the value of our currency, remember you can only influence your foreign exchange by some bedrock factors that is not this. This is just a change of figure in the naira whose cost would have added a lot better infrastructure and amenities than the country presently enjoys. [Quote by Rati ken] Am not a Yaradua fan yet but i completely agree with his doubt on the soundness of the policy. So nigerians, abeg make una no crucify our government yet. make we open our eyes dey look well well. Nigeria will still get better and great. Long Live Nigeria |
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McKren (m)
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Yaradua, his new Finance Minister and his new AGF should come up with new ideas that will move Nigeria forward not just cancelling other people's innitiatives all in the name of adhering to 1950 bureaucracies re-baptised as due-process.
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Octupus (f)
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Well,I don't think we should jump to conclusions yet until things unfold further.If the suspension of the Naira re-denomination is part of a hidden agenda,all will know soon what it is.
However,I believe most commentators have,either not studied the policy well or are simply confused about what its all about.
I agree with those who say Soludo has done well.Antecedence has shown he means well for the country and I don't think Naira re-denomination will be an anti-climax.He and the CBN should be allowed to educate the nation further.Thankfully the AG said its only a "suspension" and not a rejection.I still believe the policy will see the light of the day.
As for Soludo's fate.A man with first class honours for his 1st degree,Distinction in Masters and Phd degrees,and has such a wealth of experience on finacial matters,I think his shoes are too big for anybody in sight now in Nigeria to fill,should he by any stroke of chance be edged out as a result of this imbroglio.When he talks,I think lesser mortals should humbly listen carefully before commenting or acting.
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