Weekly Discussion - The New Naira Policy Especially the Naira Re-denomination

The new ‘Strategic Agenda for the Naira’ announced by the Central Bank of Nigeria on August 14, 2007 is generating a healthy national debate.

The CBN announced a 4- point agenda designed to make the Naira the “Reference Currency in Africa”, as part of the Financial System Strategy 2020 (FSS2020) and the elements of the agenda are:

How will it work?
The question is who will benefit from this new policy. Some people say it is the Banks if for example your account balance reads - N11,000.89k or N99.99k the banks in their rounding up will swallow up the kobo that you have and so if they do that for more than a million accounts its up to you to calculate the gain. So feel free and comment on this.

Currency Re-Denomination
Adoption of Inflation-Targeting Framework for the conduct of monetary policy
Sharing part of the Federation Account funds in US Dollars to Deepen the Forex Market and for Liquidity Management
Current Account liberalization/convertibility and accession to Article VIII of the IMF
The CBN recently released FAQs and attempted to clarify some issues raised in reaction to the New Naira Policy.

How will the Naira be redenominated?
It is by dropping two zeros from the currency or moving two decimal places to the left. The name of the national currency will still be the Naira. However, during the transition period, the existing Naira will be referred to as the “Old Naira”, and the new one to be called the “New Naira”. After the transition period, the word “New” may be dropped. F

The ‘new Naira’ coins and notes will be different from the existing ones i.e. in design, appearance, security features, etc.

All Naira assets and liabilities (including bank deposits), prices, fees, rents, and contracts (including salaries and wages) will be re-denominated by dropping two zeroes or moving two decimal points to the left.
During the ‘transition period’ prices will be quoted in both the ‘new Naira’ and the ‘Old Naira’ and everyone will choose whether to pay in the new or old Naira. These five months will be allowed so that everyone will get familiar with the conversion, and it will become self-evident to everyone why he/she would prefer to transact in the ‘new Naira’ rather than the ‘old Naira’. For example, if a bag of garri sells for N2,000 (old Naira), the price in ‘new Naira’ will automatically be N20. The customer will choose to pay either N2000 in old Naira or N20 in the ‘new Naira’. In the supermarkets and formal markets, prices will be displayed in both ‘old’ and ‘new’ Naira. In the informal markets where prices are negotiated, the negotiation could be done in the ‘old Naira’ as usual and converted into the ‘new Naira’ if the customer wishes to pay with the ‘new Naira’. This will ensure that prices do not rise due to rounding-up. The five months are also needed for everyone (formal and informal sectors) to become fully familiar with the conversion. It will become obvious to everyone that N50,000 of the ‘old Naira’ has the same purchasing power as N500 of the ‘new Naira’. The question then would be: why carry N50,000 of old Naira when N500 of the new Naira will buy you the same thing? Consequently, if you have N50,000 in your bank account, it will automatically become N500 in the ‘new Naira’ i.e. if you want to withdraw in the ‘new Naira’ or you can still withdraw N50,000 in ‘old Naira’ during the transition period (August- December 2008). Similarly, someone whose monthly salary is N50,000 can choose (during the transition period) whether to withdraw and spend the N50,000 in ‘old Naira’ or N500 in the ‘new Naira’. Both would buy him/her the same value of goods and services.

For more information look for the favorite Site section of this blog, or visit the following site:

http://www.cenbank.org/redenomination/newpolicy.asp

Nigeria: I Don't Read Local Newspapers -OBJ

A FOMER President Olusegun Obasanjo, Sunday night, told the Mayor of Detroit, Michigan, United States, Kwame Mkilpatrick and hundreds of Nigerians that he no longer reads "Nigerian newspapers" because they are fond of writing all manner of things about him to attract sales.
Obasanjo spoke at the Ogun State Awards Night where our State Correspondent, Champion's Kola Adepoju, who was nominated for the State Media Person of the Year award emerged second runner-up.

Speaking shortly after he received the Ogun State Lifetime Achievement award, Obasanjo who was flanked by Gov. Gbenga Daniel and Mkilpatrick directed his gaze at the mayor and said "some people are worried about me because they said our media have been unfair to me".

Obasanjo, still looking at the mayor as if reporting the Nigerian press to him said: "I don't read Nigerian newspapers because they are fond of publishing all manner of things about me so as to sell their newspapers," adding however, that "that is better than being crucified"

Consequently, Obasanjo in his usual humour declared that may be he would ask his lawyer to institute a legal action that would make him collect 10 per cent from any newspaper using him to attract sales.

He described the award as "a good recognition for commitment and devotion to professionalism and services".Adepoju who was one of the three "media persons" nominated for the media person of the Year Award emerged second runner up to Bunmi Ayelagbe and Miss Doyin Lasisi both of Gateway Radio.

Nigeria: PH - Troops May Remain Beyond 6 Months

The deployment of troops in Port Harcourt, the troubled capital city of Rivers State, may go beyond the initial six-month projection, the Chief of Army Staff, Lt General Luka Yusuf, disclosed yesterday.

The Army chief said the decision to withdraw the troops would be taken in conjunction with the governor of the state, Sir Celestine Omehia.

This is coming on the heels of the state government's condemnation of the call by some Ijaw leaders for a state of emergency to be imposed on the state.

Soldiers, who were deployed in the city following weeks of shootings and gun battles between suspected cult groups, are not guaranteed to leave after the initial period of six months, although Omehia said at the weekend that the soldiers would be in the city for that period.

Yusuf made the announcement while briefing the Minister of Defence, Alhaji Ahmed Yayale who was on a working visit of the Army, Navy and Airforce.

He said if the governor, as the chief security officer, "feels that the security situation has improved he will ask for the pulling out of the solders to the barracks".

He said the Army would not flood troops to Port Harcourt so as not to create the impression of a state of emergency there. Yusuf lamented that even though the police were saddled with the responsibility of internal security, "the Army is now taking a very big chunk of it even without being supported with additional logistics".

The army chief informed that the Army was now fully involved in internal security as part of their assistance to civil authority. He disclosed that most of the soldiers in Operation Restore Hope were being moved to support the ongoing operation in Port Harcourt "until peace returns".

Most of the serviceable boats are being moved from Calabar to Port Harcourt to support the operation to block the creeks to prevent the militants from infiltrating the state capital, he disclosed, revealing that more operational vehicles and Armoured Personnel Carrier (APCS) were being moved to Port Harcourt because "it will take time to restore hope and return things to normalcy in the region".Yusuf, however, charged the political class to do their own beat insisting some of the crisis had political undertone.

Nigerian Troops Battle Gangs in Oil City

Nigerian troops and gangsters fought gun battles in the oil city of Port Harcourt on Thursday, killing several people, army and private security sources said. The army launched a dawn raid on several criminal hide-outs after six days of street battles between rival gangs last week, and the gangs responded by staging an armed assault on the state government headquarters in the centre of town.

"It is mayhem here. There is a gun battle outside government house right now," said a private security source, who is not allowed to talk to the media.

A resident of Port Harcourt's old district of Borokiri said he heard intense gunfire in the area all morning."A group of men drove past my house waving guns and blood-stained knives while a helicopter gunship hovered overhead shooting," he said.

Rival gangs fought street battles for six days last week in a turf war that killed at least a dozen people and shut down most commercial activity in the sprawling, industrial city. The fighting had stopped since Sunday.

"This morning we launched an operation aimed at flushing out the bad boys who have regrouped within the city," said Sagir Musa, spokesman for the Joint Task Force, a military unit responsible for security in the oil producing Niger Delta.

"We attacked them by surprise. They responded and there was some resistance but we have broken them. We arrested some of them and killed some," he said, declining to give numbers.
Violence in Nigeria's oil heartland surged early last year when armed groups protesting against neglect and corruption in the impoverished delta started blowing up pipelines and oil wells and kidnapping foreign oil workers.

CRIME WAVE
Their attacks shut down at least a fifth of crude output from Nigeria, the world's eighth biggest exporter, pushing up oil prices on international markets and forcing thousands of foreigners to leave the delta.

But over time the violence shifted from targeted attacks on the oil industry into a crime wave. Hundreds of kidnappings for ransom have taken place as well as armed robberies and deadly gang wars. Aid group Doctors Without Borders said its Port Harcourt trauma centre admitted 71 gunshot victims in two weeks.

The army has blamed two rival militia leaders, Ateke Tom and Soboma George, for last week's fighting.But human rights activists have said that like many militias in the delta, these men were at various times sponsored by politicians who used them to rig elections or scare opponents.

Nigeria: Contract Scam Rocks Reps

A major crisis is brewing in the House of Representatives over the award of N628milion contract by Speaker Patricia Etteh to renovate her official residence and that of her deputy, Hon Babangida Nguroje.

The controversial renovation contract was blown open last weekend, just as spirited efforts made by some federal lawmakers to deny celebration of Etteh's birthday in Maryland, United States of America [USA] drew the ire of chairman of Air Force committee, Hon Halims Agoda, who vowed to instigate a probe into the mode of the contract.

Spokesman of the House, Hon Dino Malaiye had last week denied the birthday ceremony and justified the contract, saying that it passed through the normal process and with the knowledge of President Umaru Musa Yar'Adua.

He said N238.8 milion was spent on the renovation of the speaker's residence. Insisting that he would call for a probe into the contract, Agoda said that there was no way the president would get himself involved in such a frivolity he vowed yesterday to pursue the matter to a logical conclusion when the House resumes early next month from its- seven weeks recess.

"I read it as part of the report that the president of the country is aware of the approval of the contract. That is arrant nonsense. The President of a country has no right to approve whatever thing that comes to the National Assembly. The President cannot dabble into our pool. What the President normally does is to direct the release of our money, not to get himself involved in the approval of item by item." Agoda said that the Etteh leadership faced a moral burden to defend using N628milion to renovate a building that was renovated two years ago in an administration that preaches transparency and accountability, adding that the building was owned by the FCDA and not property of the National Assembly.

To salvage the image of the House that has been battered, Agoda vowed that the award of the contracts would be probed when the House resumes from its holiday, insisting that it was wrong on the part of the leadership to spend the money belonging to the House without due process. "Some of us will take the gauntlet to fight for the investigation of that publication, because in the first place, using N628m to renovate a standing house is unbelievable even if you are to build a new house, must it consume such a whopping sum of amount?

"I read too that the money was attached to capital votes, now, I am aware that when we were passing the capital votes, the capital votes of the House of Reps were tied to specific headings and if this money is to be swapped from one heading to another, it must be through virement and no virement whatsoever has been made."

Agoda also faulted the process the contract went through, saying that a contract of such magnitude should be published in journals and not on the notice board of the National Assembly as done by the management.

"It is not a contract of N10 million, so, I am deeply surprised that it's happening in an era of transparency and accountability. So I still believe that it is not correct. We have a moral crisis if the issue is true, we will call for investigation. I have been here, we built this House of Reps with all our efforts and so, nobody will come here and pull it down," he pointed out.

Agoda said that for Madam Speaker to take her birthday bash to the US was uncalled for at a time the nation was settling down, adding that the nation was blessed with leisure places such as Obudu Cattle Ranch, Mambilla Plateau to have such a party.

Instead of engaging in frivolities, Agoda advised Speaker Etteh to re-order her priorities so that she could build on the solid foundation laid by her predecessors, Na'Abba and Masari. Etteh presided over a 40 minutes meeting of the management of the House on July 12, 2007 to award the contract for the renovation of her official residence and that of her deputy and the purchasing of vehicles on their convoy.At the meeting with the Speaker and her deputy were the Chief Whip, Deputy Leader, Chairman of Ad-hoc committee on Welfare, who is now Chairman of Appropriation Committee, Wale Adegoke, Clerk of the National Assembly, Ibrahim Arab, his deputy, Acting Clerk of the House, Directors of Works, Legal Services, Finance and Supplies.

Was Obasanjo born by an Igbo father?

Was Obasanjo born by an Igbo father?

A B The personality in picture A is not former president Olusegun Obasanjo who is in picture B. But what do both personalities have in common? The man in picture A was an Igbo who lived in the Abeokuta area of Ogun State in the 1930s about when the former president was born. He was a police officer who later became a monarch on a prominent south-eastern throne. But before leaving the south-west, he interacted fruitfully with the local community and had a brief affair with an Owu lady. COULD THIS BE THE MAIN REASON WHY OBJ KEPT FAITH WITH THE UBA'S

Source: The Nation Newspapers

All Set for Speaker's Birthday

Mrs. Patricia Olubunmi Etteh, the 54 -year old hairdresser turned Speaker of Nigeria’s lower House of Assembly is to celebrate her birthday in style on Saturday night in Bowie, Maryland. The event which was shifted from Thursday till later tonight will commence at 6 P.M at a huge garden of a mansion belonging to a family member in Bowie, Maryland barring last minute change of mind.

This grand event will involve several members of the lower house of representatives who have already relocated to the US for the purpose of the party. The birthday bash is expected to cost Nigerian taxpayers close to $90,000 according to sources in the know of the magnitude of preparations for the event.

Saharareporters could not confirm the exact location of the event as the time of going to press, but our sources said there are already 12 aides to the Speaker on ground to assist her with chaperoning guests around the huge mansion where the event will be taking place in Maryland. These include her Chief of Staff, Special Adviser on Special Duties and the Special Assistant on Media amongst others.

The latest development puts a lie to the press statements issued yesterday by other leaders of the lower house that the 54 year old speaker was currently in the US for medical checkup. There is no truth in that assertion. The speaker arrived to the US on Wednesday evening on a flight from London in preparation for the big bash. The event is wholly planned by the Chairman, House Committee on Appropriations, Honorable Festus Adegoke. The lawmaker who is almost ten years younger than the Speaker, is known to have dated the speaker for close to four years. They are both married with two kids according to their profile on the website of the National Assembly.

This info was gotten from Saharareporters.