Senate probes scarcity of lower currency denominations, orders CBN to re-introduce coins

- The Senate has said that the scarce denominations of the Naira are critical to the economic growth of the country

- Senator Peter Nwaobosi alleged that the lower denominations are in short supply because the CBN has ceased to supply them

- The resolve by the Senate as an alternative to the lower note was that the CBN should re-introduce the use of coins into the economy

The Senate on Tuesday, February 13, ordered its committee on banking, insurance and other financial institutions to probe the scarcity of lower currency denominations in the country.

The lower denominations in insufficient supply are N5, N10, N20, N50, N100 and N200. The red chamber said the scarce denominations are critical to the economic growth of the country, especially as it recently recovered from recession., The Guardian reports.

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The resolve came after a motion was spearheaded by Senator Peter Nwaobosi, who said most commercial banks explained no longer circulate the lower denominations because the Central Bank of Nigeria (CBN) has stopped supplying them.

The lawmaker noted that for the past one year, the CBN did not award contract for the printing of the lower currency notes. He also stated: “The lower denominations were printed and procured outside the country with the attendant economic and security implications.”

The CBN, however, was asked to re-introduce the coins as an alternative to the lower notes, since it was said to be more sustainable and have longer shelf life than currency notes. The Senate also subjected the finance minister, Kemi Adeosun and minister of power, works and housing, Babatunde Raji Fashola to serious interrogations over their roles in the alleged diversion of $350 million.

But the Nigerian Sovereign Investment Authority (NSIA), presently managing the fund for the Nigerian Electricity Bulk Trading Company (NBET), pointed out that it has grown to $384 million. At a public investigative hearing recently organised by the senator Matthew Urhoghide-led committee on public accounts, Uche Orji, the managing director and chief executive officer of the authority affirmed that the fund was safe.

The money was part of the $1 billion Eurobond facility obtained in 2013, but Adeosun and Fashola alternately told the committee that it was untrue that the said sum was diverted from the NSIA. The Senate also expressed dismay over what it called fraudulent diversion of approved petroleum funds meant for the maintenance of federal roads across the country.

It declared that a thorough investigation would soon be conducted to find out why the portion of the petroleum funds as provided in the template of the Petroleum Products Pricing Regulatory Agency (PPPRA) was never released for road maintenance.

The Senate committee on Federal Roads Maintenance Agency (FERMA), which revealed this at the National Assembly made it clear that operations of the agency had been frustrated because of lack of insufficient funds.

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The chairman of the committee, Senator Magus Abbe, was surprised about how a law that was enacted to compel PPPRA to remit a certain percentage from the sale of each litre of fuel to the FERMA could be ignored and sabotaged to pave way for the diversion of the fund to unknown accounts.

FERMA has also revealed that it is indebted to the tune of N15 billion to contractors. The acting managing director of FERMA, Nurudeen Rafindadi, who made this known at the budget defence session with the committee, said the agency’s debt profile is preventing it from paying its contractors.

He said: “FERMA’s debt profile is huge and there will be need to settle outstanding debt in order to encourage contractors back to site.”

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Meanwhile, Legit.ng reported that the Nigerian Naira on Tuesday, February 13, retained its strengthened rate at the parallel market against Dollar.

Legit.ng gathered that the local currency maintained the same rates of N363 against Dollar, as it was Tuesday, February 12, but appreciated against Pound and slipped against Euro.

Can 1 Naira ever become 1 US dollar again on the Forex market? On Legit.ng TV

Source: Legit.ng