• Chizea: ‘The Central Bank is being alive to its responsibilities by undertaking this exercise’
• Kalu: ‘Fa fa foul!’
The duo of Drs. Boniface Chizea and Kalu Idika Kalu, both respected economists, had been thrown into opposing camps on the impending introduction by the Central Bank of Nigeria (CBN) of new Naira currency notes in three denominations.
The affected denominations, according to an announcement in the twilight of October 2022 by the CBN Governor, Mr. Godwin Emefiele, are 200, 500 and 1,000, respectively.
In a swift reaction to the announcement in a Facebook on his timeline dated October 27, 2022, titled: NEW CURRENCY NOTES TO BE INTRODUCED IN THE COUNTRY!, Dr. Chizea had noted that the CBN Governor had “during a press conference today, Wednesday, October 26, 2022, announced the decision by the Bank to introduce new currency notes in the denominations of 200, 500 and 1,000 notes haven received the necessary approvals!”
Continuing, Chizea had rehashed the various points of Mr. Emefiele’s announcement, even he offered his thoughts alongside those points Chizea stated “Currency in circulation outside the banking system the Governor reported is estimated at 85 percent! Now this is unacceptable as this situation undermines the effectiveness of monetary policy.
“The new notes will be introduced on December 15, 2022 but the old currency notes will be allowed to be in circulation as legal tender until the end of January 2023 after that time the old notes will cease to be legal tender currency. The period allowed for this exercise is considered quite adequate.”
Encapsulating Chizea’s position on the exercise are his concluding paragraphs, stating: “This is a strategy to checkmate inflationary pressures as the liquidity in the economy is thus better regulated. All charges for currency handling by the banks during this exercise will be suspended in the interim to facilitate the exercise.
“The Central Bank which has the mandate to issue currency notes and regulate money supply in the economy is being alive to its responsibilities by undertaking this exercise. In fact, this exercise is behind schedule going by the recommend interval for such exercise to be undertaken.
“We pray that the exercise will be seamless and deliver on the anticipated promise in the greater interest of a troubled Nigerian economy.”
However, even as he extended the Like reaction to Chizea’s post, Dr. Kalu’s comments on it bore eloquent testimony to the fact that he was vehemently opposed to the impending new currency notes introduction exercise.
His stiff opposition to the exercise notwithstanding, the two-time Nigerian Finance Minister had opened with the comedic “Fa fa foul!”, a favourite line deployed by Chief Zebrudaya Okoloigwe Nwaogbo, the lead character in the Nigerian television sitcom series, Masquerade and New Masquerade, respectively, in disagreeing with a matter or roundly condemning whatever.
Kalu had itemised his position thus:
“1. It’s not the remotest solution to the current inflationary spiral and the continued downward slide of the naira.
“2. It does not address the fundamental disconnect between monetary, fiscal polices and exchange rate management lapses in the context of a minimal market-pricing signals, optimal mobilisation and allocation of both naira and foreign exchange resources
“3. It does not address the sustained wide arbitrages in disparate extra-market based forex pricing and discretionary (mis)allocation that has been unprecedented in its wide arbitrages, unwarranted discretionary allocation at so-called ‘different, windows’!!! It’s really DUMB, and, its COST ASIDE, this brahaha shouldn’t be a substitute for a detailed review, and duly considered implementation of sound monetary and fiscal policies that should gradually restore sustainable stability of general prices, effective interest rates, and exchange rate stability!!!”
Continuing, he added: “This panic ‘administrative ambush’ is not merely draconian, but counterproductive and confusionistic, in the extreme! It lends itself to increased corrupt practices not less!!!! GOVERNMENT needs to work with its ECONOMIC ADVISORY team, AND, as necessary, seek second opinions and technical advice from our international financial and development partners, the IMF (International Monetary Fund), the World Bank, and, of course, the AfDB (African Development Bank)!!!!!! This is 2022 . . . timely enough for this great nation to mobilise optimally for growth and development, with greater efficiency, and zero tolerance for shoddy bureaucracy, and corruption!!!!!!!”
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