ZHUL-QI’DA 22, 1429 A.H.
MONDAY NOVEMBER 17, 2008
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‘New Naira’ underway Federal... As FG revisits re-denomination issue
government at the weekend re-assembled experts from the financial sector to fine-tune mechanisms for the proposed re-denomination of the naira.
The News Agency of Nigeria (NAN) reports that the re-denomination,introduced by the CBN on August 14, 2007 was suspended after it was trailed by controversy.
Declaring a meeting of the experts open, the Vice-President, Dr Goodluck Jonathan urged them to come up with suggestions that would assist the federal government in taking the right decision on the re-denomination.
"We think that in certain issues that will affect our countrywe should look for the best brains to come up with a position to guide the government and also ensure that Nigerians are carried along," he said.
He explained that the re-denomination was suspended by government following the controversy it generated from some sections ofthe public.
"One thing about Nigeria is that everybody is an expert in everything.
"If you go to a soccer field, a person who does not know how to kick the ball will claim to know better than the coach," he said.
The Vice-President, therefore, charged the experts to use their wealth of experience to offer useful suggestions to the government on how best to implement the proposal.
The CBN governor, Prof. Charles Chukwuma Soludo, said the re-denomination was designed to scale down the level of prices and align the currency structure with the underlying inflation and price formation dynamics.
His comments were contained in a paper entitled ``Naira Re-Denomination: Some Clarifications", which he delivered at the meeting.
He dismissed the view in some quarters that re-denominations were only carried out in countries with hyper-inflation.
"No country has ever succeeded with re-denomination during the period of hyper-inflation.
"It is a correction that happens after countries have experienced high and persistent level of changes in prices,"he said.
Soludo, therefore, said that the re-denomination was being undertaken to bring currency structure in line with inflation and price formation realities.
He further said that under the proposed currency regime the Naira would be called "New Naira", with one Naira equal to 100 kobo.
He said that the nation's currency structure, under the `New Naira’ arrangement would be six coin denominations and four note denominations as against the existing 3 coin denominations and 8 note denominations.
Soludo said that under the new currency structure, the campaign against Naira abuse would be more effective as lower denominations of N5 to N50would be converted to coins.
"Similarly, 'squeezing' the Naira during church offerings or similar occasions will be minimised as most people would then give coins in offertory.
"Under re-denomination, most bus and taxi fares will be in coins, hence eliminating the criminal abuse of the currency in these places," he said.
