Central
Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi has said for Nigeria to
beat the ingenuity of counterfeiters, there is a need to redesign the Naira.
Sanusi
also revealed that the Excess Crude Account is down by $7bn from $12billion to
$5billion.
Sanusi
told the Jones Onyereri- headed House Committee on Banking and Currency
yesterday that the “ noise” about the 5000 Naira notes was the reason the CBN
shelved the plan, which, according to him, should be done every seven to eight
years.
The
House brought the CBN and other stakeholders to an interactive session on three
motions referred to the committee. The motions are: •the rising incidence of
fake Naira being dispensed from Automated Teller Machines (ATMs); •the urgent
need to stop banks from introducing N100 maintenance charges on ATM cards; and
•need for a single digit interest rate to encourage small- scale investors.
Sanusi
said restructuring of the Naira would stop fake currency.
He
said: “One of the reasons we wanted to have a restructuring of the redesign of
the currency a few months ago was because, as explained, many of our notes had
been in existence for upward of eight or even ten years. Now best practice is
that within a period of five to eight years, you redesign the currency because
after that period counterfeiters tend to catch up. Even at that, Nigerian notes
in terms of what we see as counterfeit and processing, the percentage is very
low.”
Giving
the percentage of counterfeit notes per million, he said: “We had about 3.9 per
million in 2007, 6 per million in 2008, 8.4 per million in 2009, 7.4 in 2010,
5.4 in 2011 and 8.4 per million in 2012 of the notes processed which were
counterfeit.
“But
with ATM machines, it should not happen because it has been processed and we
would be very pleased to know if there are specifics about any bank so that we
can draw their attention on the importance of processing them before putting
them in ATM machines.
“Now,
unfortunately, the redesign suffered because of all the noise around N5,000
and, therefore, it is being delayed because that is what would have made it
impossible for counterfeiters to forge so they have to wait for another five,
six, seven years before they learn how to counterfeit by which point , the CBN
should be redesigning the notes again.
“So I
suppose that at some point the country would have to revisit the issue of
redesigning the notes but at the moment, based on popular demands, we have had
to step down the redesign.”
On
interest rates, the CBN governor said delivering a low rate of interest is the
easiest thing for the apex bank “because the CBN prints money and interest
rates come down when you have a lot of money and that is not a problem.”
“If you
want interest rates of 2 per cent, it is not a problem; we simply double and
triple the money supply in the system.”
He,
however, said that was not the way to go.
Sanusi
said a weak currency shoots up import and banks may not be lending to the real
sector for other reasons, apart from interest rates. Other things to consider,
according to the CBN boss, are power, security, storages, credit records and
customer identification, amongst others.
“ When
MPR was at 8 percent, how much were being lent to manufacturers? It was going to
shares and oil marketers,” he said.
The CBN
governor said there was need to attract foreign exchange because the country is
import dependent. “In the current environment, the likelihood of rates going
down is very low. It is more likely to go up,” he said.
Sanusi
gave the solution to the problem as reduction in government domestic borrowing,
completing reforms in the power and petroleum sectors, ensuring security and
providing infrastructure that will attract foreign investment and stimulate
domestic business.
He
revealed that the Excess Crude Account is down from $12 billion to $5 billion
because the economy is import dependent and money had to be moved to balance
the budget.
Sanusi
warned that there are economic postulations that oil may likely sell for as low
as $60 and that there is need for the country to diversify, if the government
keeps borrowing at the between 13 to 14 per cent and keeps increasing the
budget deficit, the country may be in trouble.
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