Foreign reserve hits $26.9bn; N1,000 note out next month

By Emmanuel Aziken

09.09.05

Abuja

Nigeria's foreign reserve has climbed to a record $26.9 billion, the highest ever for a sub-Saharan African country. Already, the Central Bank (CBN) has given indication that the N1,000 currency note would go into circulation next month.

The disclosures at an interactive session between the CBN and the Senate Committee on Banking, Insurance and other Financial Institutions came as the CBN was directed to heed to the provisions of its establishment law requiring it to send half yearly reports to parliament.

CBN Governor, Prof. Charles Soludo, led the bank’s senior officials to the parley with the Senate Committee chaired by Senator Gbenga Oguniya. Other Senators present at the session were Committee vice-chairman; Farouk Bello; Sanusi Daggash; Victor Ndoma-Egba (SAN); Abu Ibrahim and Isa Maina.

Noting the increase in the foreign reserve, Prof. Soludo equally gave the bank’s determination to stabilise the nation’s investment climate through the stabilisation of monetary and other financial indicators, and notably the exchange rate.

“Our external reserve is now $26.9 billion, it is the highest in our history and the highest in sub-Saharan Africa today. We are fundamentally trying to change the way that the foreign reserve in this nation is managed (and) our proposal will soon come to the National Assembly as a bill. We want to stabilise the naira to enable potential foreign investors plan better,” the CBN Governor said.

Giving indication of the introduction of the N1,000 currency note, the governor said earlier plan to introduce the currency in the form of a paper currency and a plastic (polymer) variation had been curtailed as a result of operational hitches on the part of the minters. He said only the paper currency would be introduced from the middle of October.

“We also embarked on issuance of N1,000 note which had been designed before my assumption of office. We decided to experiment with polymer or plastic money… but we soon realised that the polymer group (minter) will not meet the deadline of mid October, so we are printing the N1,000 note all in paper. Our goal is that by the end of 2006, we will no longer import bank notes or coins from abroad,” Prof. Soludo said.

The CBN boss drew questions from committee members on various issues affecting the sector.
 

On the criteria used in listing banks to benefit from the CBN’s decision to write off the indebtedness of some banks to it, he said those banks that had overdrawn balances with the CBN were essentially listed, adding: “The banks that were allowed to die, they died and were buried before I arrived.” Defending the measure further, he said the effort had saved more than N100 billion of consumers’ funds in the affected banks from sinking.

On the CBN’s quest for complete autonomy, the CBN boss praised President Olusegun Obasanjo for not interfering with the functions of the bank, saying the autonomy had allowed for the sustenance of policies. Prof. Soludo equally gave the bank’s determination to completely eliminate the use of Ways and Means (printing of money) as a means of increasing government finances even as he defended recent efforts by the apex bank to increase its internal revenue through charging the banks for services rendered.