Group Managing Director of Global Fleet Group, Barrister Jimoh Ibrahim, has said the revelation that the Central Bank of Nigeria (CBN) printed the N420 billion it recenty injected into five banks in the country has justified his suggestion last year that the nation should print more naira in response to the economic and financial crisis.

[b]Responding to a question at a Town Hall meeting with stakeholders in London on how the CBN sourced the N420 billion it recently injected into five banks in the country, CBN Governor Sanusi Lamido Sanusi said: “We printed money. We created an asset on the balance sheet basically to pump money into the system because money supply had been negative in the first half of the year. We did not borrow money.”[/b]The Global Fleet chief had in July last year while reacting to the global economic meltdown suggested that the apex bank should print more naira. The suggestion was widely criticised and allegedly discarded by CBN under its immediate past governor, Prof. Chukwuma Soludo.
But now, according to Ibrahim, the new CBN governor has “followed the advice and unknown to many, it has quietly gone underground to print more naira”.

After Ibrahim made the recommendation, countries such as the United States of America and Britain printed more money under one form of monetary policy or the other.

In Britain, the policy measure was called quantitative easing, which succeeded in injecting fresh 125 billion pounds into the British economy. In the US, the authorities called it direct intervention.

Reacting to the payments made so far by debtors of the five banks in Nigeria, Ibrahim said the debtors as published by CBN are highly credible individuals who have made meaningful contributions to the development of the economy by taking risks.

"we printed the money"

Where on God's earth is this Sanusi guy from?

Xavier.:

"we printed the money"

Where on God's earth is this Sanusi guy from?

Na now una know say na boko haram banking the guy dey try?

He actually did this without even consulting the national assembly? I hope its not true anyway.

Dis one na Idi Amin style abi na wetin?

Printed N420m and no one knew about it. What kind of economist is this dude?

@topic That means the naira is going to be devalued further. yeh!

Anyone still doubting the fact that this guy (Sanusi) acting out a script should ve his/her examined.

This is really really terrible.

I was always wondering where the money that was injected into the banks came from since provisions were not made for it in the budget

Gaddammit, we are in for some inflation soon. If I had money, I would be stocking up on foreign currency. There is going to be some kinda inflation soon and naira rate would surely fall some more.

i think this guy is tryin to turn nigeria into islamic nation, you guys should watch and give him close mark. am out

Rogo:

i think this guy is tryin to turn nigeria into islamic nation, you guys should watch and give him close mark. am out

Its not even a case of islamising the country. The Job is proving too big for him.

Soon the international community will be convinced of the nothingness of his approach then we will begin to see things more clearly

source of news has to be verified first please

Rogo:

i think this guy is tryin to turn nigeria into islamic nation, you guys should watch and give him close mark. am out

exactly, the same way UK and some other countries already printing money during the recesssion and implementing islamic banking!

This guy printed billions and spend on banks just like that. Not thinking of Inflation and other effects. You see the mediocritic levels our CBN have descended to !
This guy is now looking more like an imbercile !
Well I've pulled out all my investments including stocks and deposits from that economy. It will take a generation 2 go back in there.
Now I am one of those who now believe that there is no hope for Nigeria.

you mean the person that suggested it and the person tha implemented it are imbeciles?

Dis Guy:

exactly, the same way UK and some other countries already printing money during the recesssion and implementing islamic banking!

So the UK banking system is now turning Islamic in your view ? Nice one, keep it up one day you'll make it to the top at CBN, NNPC or NEPA.

Islamic banking has been discussed in the UK and i'm sure it's been practised too- I didnt hear one single mention of the uk turning islamic just because an islamic product is being offered but in nigeria its something else entirely!

Islamic banking was discussed last year or the year before under soludo no one mentioned islamizing nigeria but now a mallam is in charge and the word is everywhere- just amused the way we are so quick to leave our brains behind to jump on a bandwagon with the vanguard leading the way of course

Well yes , there's nothing wrong with islamic banking and any nation could practicemultiple banking systems if  it wants. But they should't be resposible for setting up and running these banks. Islamic or not.
Whichever thrives and succeeds will be the dominant banking system. This is all based on natural market forces.
There nothing wrong with Islamic banking as far as im concerned. But I doubt its success in Nigeria. Because the area where this form of banking will be attracrtive to have nothing to help any form of banking thrive. And I dont see many muslims in Nigeria coming foward to set it up. This was eveident during the consolidation exercise.
But if you think that the Banks should be set up and ran/ supported by CBN/Government, as (I may be wrong I once heard that these banks dont make profits ) then you need to have you head checked !
I now understand why people in the south might be apprehensive about some policies. People should be allowed to do whatever they want as far as it does not affect others and it doesn't smirk of undue advantage at the expense of others.
Who cares about islamic Banking !
Where was it when the Anglo-Saxon dominated world banking systems including in Islamic countries!

Abacha must be Sanusi's mentor. Its amazing how he is been replicating all of the former's deeds: sacking and jailing top bankers, printing money and doling it out into the economy.

I ve a feeling that some of the cash purportedly been paid to the ND freedom fighters might be coming directly from the Mint.

Well, while we are at it, maybe we could print out some more cash for ASUU.

Nothing wrong with a bit of quantitative easing. We will see the effect on inflation maybe. Either that or deplete Naijas foreign reserves. Alternatively, let the banks fold and account holders lose all their cash. Perhaps quantitative easing was the best option from all the models available to Sanusi.

You call PRINTING N420 billion worth of CASH in an economy like ours quantitaive easing?

You should get a refund from your econmic lecturers.

Xavier.:

You call PRINTING N420 billion worth of CASH in an economy like ours quantitaive easing?

You should get a refund from your econmic lecturers.

Refund ke?. . . . common $2bn dollars na im you dey shout. . . .

Ibime

We in the world do government still print out currencies and pump into the economy? And u call that quantitative easing.

Xavier.:

Where in the world do government still print out currencies and pump into the economy? And u call that quantitative easing.

Its quite obvious you were the one who needed the refund from your higher institution. Britain and Yankee are also printing currency at this very moment. For a country with $30bn reserves, I do not consider $2bn worth of quantitative easing to be extreme. Yankee printed $300bn to buy junk assets from their financial institutions whilst Britain also printed £125bn.

KnowAll:

Easing a currency is for countries that have enough assets, and Nigeria has assets worth $52 billion dollars in reserve, in fact I doubt the current exchange rate of the Naira to the dollar, the Naira had gained considerably to all foreign currency in the last 4 years, but those in authority deliberately let it stay down.

The strong Naira was the reason why Soludo came out with the redenomination proposals, but the government of Yardua rejected it hands down. I would not be surprise if this policy is revisited by Salami. Ghana did it hence the turn around and boost to her economy.

Well said. . . . I think our foreign reserves are no longer $52bn sha. . . . it was about $43bn last time I checked. . . I expect it would be around $30bn now cos its been dropping steadily all year to plug holes in the budget.

just like idiamin did in his days.May God have mercy.

This is simply unbelievable.

Ibime

Last i checked, those countries u mentioned injected capital to stipulate their economies. The closest to what Sanusi has done, is the quantative easing, being proposed in the UK, and even that does not involve minting new currencies.

So u still good grounds for getting a refund from ur tutors

Ibime:

Its quite obvious you were the one who needed the refund from your higher institution. Britain and Yankee are also printing currency at this very moment. For a country with $30bn reserves, I do not consider $2bn worth of quantitative easing to be extreme. Yankee printed $300bn to buy junk assets from their financial institutions whilst Britain also printed £125bn.

Ibime, you surely do need a refund! Even if partial.
Seriously, you should know that there are only 3 currencies in the world that can actually use quantitative easing without experiencing inflation! And that's the Euro, Pound and Dollar. Reason been that much of that money would be sold outside it's shores for other countries to hold or utilize in international trade transations.
And to think that 420 billion Naira is about 25% of this year's budget!
Its called Sanusi's Sudanese styled economics!! Hyperinflation in the making!

Xavier.:

Ibime

Last i checked, those countries u mentioned injected capital to stipulate their economies. The closest to what Sanusi has done, is the quantative easing, being proposed in the UK, and even that does not involve minting new currencies.

So u still good grounds for getting a refund from your tutors

Pls stop dribbling yourself.

PapaBrowne:

Seriously, you should know that there are only 3 currencies in the world that can actually use quantitative easing without experiencing inflation! And that's the Euro, Pound and Dollar.

Even the Euro, Pound and Dollar risk inflation by quantitative easing.

Of course, I already stated thus:

Ibime:

Nothing wrong with a bit of quantitative easing. We will see the effect on inflation maybe.

Therefore, I dont need a refund! 


Whichever way Sanusi chose to address the problem, he risked devaluing the Naira and subsequent inflation.


If he borrowed money and increased our trade deficit, the Naira faces risk of devaluation.

If he let the banks fail, he causes panic, local and foreign investors lose holdings, Naira risks devaluation.

If he chooses quantitative easing (which he did), Naira risks devaluation.


Whichever way, the problem requires Naija to take some hits.

Until anyone analyses the three economic models available to Sanusi from which he made his decision, any judgement would be too hasty.

Nigeria we hail thee!

. . .But how can the head of CBN just decide one early morning to crank out mega billions without consulting a soul? Nigeria is absolutely rudderless under Yar Adua.

Printing money is only justifiable, if ever, where the economy faces serious threat of deflation. It is the height of insanity to print money in an economy where inflation, according to official figures, is running at +7%.

Nigeria shouldn't do something

Ibime:

If he borrowed money and increased our trade deficit, the Naira faces risk of devaluation.

That's not true. If you borrow $2.8bn( assuming exchange rate of N150 to $1), that poses less risk to Naira than printing N420bn. It has no effect on the trade deficit as the money is not for the purposes of importation but to boost the banks.