… Urges those in commerce and industry and others to accept old notes
Dr Kalu Idika Kalu, a renowned economist, served Nigeria as among others, the Minister of National Planning; the Minister of Transportation and; twice the Minister of Finance. In the year 2003, he aspired for presidency under the platform of the New Nigeria Peoples Party (NNPP).
in this telephone interview he granted our correspondent, ABBANOBI – EKU ONYEKA recently in Abuja, from Lagos, he blamed the Central Bank of Nigeria (CBN) for making a mess of the redesigning of some of the naira notes, saying that the apex bank didn’t make enough plan before venturing into the project. He however regretted that Nigerians have been undergoing a lot of sufferings, as a result of the inadequate planning, even as he advised those in commerce and industry and others to be accepting the old currencies, until the date they will seize to be legal tenders. He recommends arrest of any banker that rejects the old notes.
Qtn: As an economist of note, are you ready to speak on the economic effect of the redesigning of some naira notes?
Ans: Before I even came back to this country, people listen to me in Washington, New York and London. I worked on Japan, Korea, Japan and Hong Kong. I can talk about the economy any time. If you wake me up from sleep by 3 am, I can talk on the economy straight and I can’t indulge in generality, that is me. They messed up a lot and the worst messing up now is this so called currency change.
Qtn: Can you briefly speak on the redesigning of some naira notes by the CBN to the economy?
Ans: Every country changes their currency and it is neither a big deal, nor a new thing. As we speak now, there may be about six countries that are changing their currency denominations. And when they change it, the reason may be that some notes are torn, some are too dirty to be in circulation. Some may be done with the reason that they want to put new pictures of their heroes, like the heroes we have in our N1000, N500 and N200 notes or; introduce new ones. Some change it because people have counterfeited it too much.
However, it is a routine thing, but before you do it, you have to study; you have to decide which one you want to do. To talk of changing it to stop corruption; to talk of changing it to stop inflation; to talk of changing it to stop vote – buying; you talk of changing it to stop couterfeiting, wich I have mentioned earlier; you see, you have to agree on why you want to do the change.
Secondly, this is a large country. Nigeria is roughly about one of the top 10 largest countries in the world. About two hundred plus million people scattered almost over 400 square miles. Therefore, you have to plan how to do it, so that people don’t even need to know what you are doing. They are not interested, all they need to know is that they want to change this currency, you can start changing it and by this date, it will go out of use. You don’t do any how pushing. You pick a time frame to change without studying how long it will take you to print what you have to give back in exchange for the old ones.
The president would botch it up. The CBN didn’t do its homework; they messed it up, with people who are advising them, like those in Aso Rock and the rest of them and the president who didn’t even understand these intricate issues.
And it is tragic that some Nigerinas, including a lot of our people don’t understand all these details I just gave you and they were supporting it because they thought, eh they want to stop somebody from buying votes. But for Christ’s sake, how many people are involved in buying votes and so on, that you go and disrupt what we call the supply chain? Supply chain is all the way down to the villagers who produce one thing or the other; people who are involved in their private businesses. How many people are involved when you want to change to stop those who are buying votes.
I think it is now very obvious. I was in America. I gave press conference in America four months ago and I said this is the normal thing, but you have to plan it to know how much time you need to print the paper, for Christ’s sake; you know how much time it will take you to dispense it through the commercial banks; you know the quality of electricity, so if you are forcing people to go and be getting money through poles or banks, you know how many people that have access to that kind of system. So you put those things into account, before you agree on how much time. It takes some countries two and half years, three years, one year to do this.
In a country like Nigeria, it is not a matter of a few months, because unless you already have the new notes printed. You have to be sure. Further more, you have to know the logistics of printing and didtribution. Unless you do all these wotks, you cannot come up and announce that by the October the 1st or by the middle of November, or even by the end of December. Any date you announced, you must have done your home works. Hope you understand what I am saying clearly, because this isn’t a matrer of an emotional political decision you just take to suit the fancy of Mr President or Mr Attorney General or the Senator or a Governor or a Political leader, no! It is a technical matter.
The issue has to do with if you have the right to do the change or nor. Of courrse you have the right, but that right, listen to what I am saying. But that right presupposes that you know what you are doing. You don’t have to do everything, saying I am the CBN. I have the right to change the currency, therefore no supreme court. No, it is not done like that.
Qtn: What will you advise those in the commerce and industry and others should they continue to reject the old notes?
Ans: I advise those in commerce and industry and others to cintinue to accept the old notes. The only time when they will stop accepting them is from the 31st day of December, 2023.
Qtn: What do you think should be done if the commercial banks that issue out these old notes continue to reject them?Ans: Such banker should be arrested. So it is not just for the people or the Igbo traders or whatsoever, the Igbo traders should use their senses, the people and the bankers should also use their senses. The CBN messed everything up; they didn’t use their own senses, but that will be corrected. They should use between now and December 31st to print the new notes and be replacing the old ones as they print the new ones.
The way it works is that they should be printing the new ones, so that any time you go to the bank, they give you more of the new ones, until they finish recarrying the new ones. That is the way it works everywhere in the whole world, where people reason with their brains.
Qtn: The naira is very scarce, both at the banks and at the ATMs and still prices of goods and services continue to rise, instead of coming down, due to the scarcity of the currency. The POS operators sell the naira at N1000 for N1300. When you transfer N1300 to them, they give you N1000 cash. Can you comment on this?
Ans: We are very stupid people, starting with our government. As I said earlier, the people who changed the money should have planned it and brought enough currency. When they brought enough currency, those who produce goods; those who supply those who produce goods; those who carry the goods; those who store the goods; those who carry the goods all over will continue to do their works. But if you don’t print the currency, all those activities will stop. If those activities stop so suddenly as it has happened now, those who don’t have money to buy them, the thing may seem to be cheaper. Unless you produce more, the price will begin to go up again.
Qtn: What is your take on the continued increase in the prices of goods and services when the money is very scarce?Ans: It is because, what is even more scarce is that the people don’t have money to buy. That is what is even more scarce.