The Governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo, on Monday said that the bank had accepted President Umaru Yar’Adua’s decision to suspend the re-denomination of the naira.
CBN Governor, Prof. Chukwuma Soludo
Soludo, in his first reaction to the controversy that had trailed the policy, said that Yar’Adua’s action was in the best interest of the nation.
He said, in a five-paragraph statement made available to our correspondent, that the CBN remained committed to the President’s desire to make Nigeria one of the 20 largest economies of the world in 2020.
The statement reads, “For the good governance of the country, the President and Commander-in- Chief of the Armed Forces of the Federal Republic of Nigeria, Alhaji Umaru Yar’Adua, has spoken on the policy issue of the re-denomination of the naira.
“The Board of the CBN recognises and reaffirms Mr. President’s approving authority in matters relating to the denomination, forms and design of our national currency, as enshrined in Section 19 of the CBN Act 2007.
“The bank, therefore, accepts Mr. President’s decision to suspend the implementation of the re-denomination aspect of the ‘Strategic Agenda for the Naira.’
“The CBN remains committed to the President and his avowed goal of making Nigeria one of the 20 largest economies in the world by 2020.
“To this effect, the CBN is committed and ready to do all that is within its mandate and powers to accelerate Mr. President’s agenda for a stronger Nigerian economy.
“Finally, we wish to thank all Nigerians for their understanding and the healthy and positive contributions to the policy debate.”
Soludo, however, was silent on whether the CBN would seek the approval of the President for the reintroduction of the redenomination at a later date.
The suspended redenomination of the naira was part of the four-policy measures announced by Soludo on August 14, aimed at strengthening the naira and deepening the foreign currency market.
Under the policy, two digits were to be removed from current naira denominations. Thus, N1, 000 note was to become N10 and N100 was to become N1.
Other aspects of the policies were inflation targeting, sharing part of the federation account in dollars and current account convertibility.
The redenomination of the naira was to come into effect on August 8, 2008.
The policy, which was announced on August 14, 2007, was however trailed by controversy.
Some economists and political parties had argued that the naira was not in dire need of redenomination but others said it was a welcome development.
While the debate raged on, the Presidency on Friday announced the suspension of the policy.
It said the CBN contravened Sections 18 and 19 of the bank’s Act in relation to the naira issue.
The CBN governor had attended a Federal Executive Council where he briefed the members on the policy.
The Special Adviser to the President on Communications, Mr. Segun Adeniyi, explained on Saturday that the CBN did not secure the President’s approval as required by its Act before unveiling the policy.
Adeniyi said, “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 redenomination 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."
Meanwhile, there were indications on Monday night that the Federal Government might not remove Soludo from office.
A highly-placed source told one of our correspondents in Abuja that the government was not contemplating any punitive action against the CBN governor.
The source spoke against the backdrop of insinuations that Soludo had allegedly solicited the help of Vice-President of Goodluck Jonathan to beg the President.
It was learnt that Jonathan had, in company with Soludo, met behind closed doors on Sunday night with Yar’Adua to clear the air on allegation of insubordination by the governor.
The source said, “I can confirm to you in confidence that the government has no plans to remove Soludo or demand his letter of resignation. “Both the President and his deputy actually felt slighted by the arbitrary announcement of the policy but they see it as part of a learning process. “The government also believes that the removal of Soludo will send a wrong signal to the World Bank, International Monetary Fund, and foreign investors that our monetary policy is in crisis.
“The President does not take the issue as personal. He is only after due process. Were it another Nigerian leader in charge, Soludo would have been sacked.”