Nigeria’s Currencyprofile has,notably, failed to serve the needs of our people and oureconomy. Evidently,lower denominations of primary kobo coins and low value noteshave been largelyrejected by the public because of their extremely negligiblepurchasing power. TheNaira Currency has lost significant value overtime, as thehighest existingcompact denomination of N20 (the celebrated Muri) in 1977 wasequivalent toover $20.
Although, in 2005, thepresenthighest denomination of N1000 note exchanged for over $8initially, but regrettablynow, exchanges disturbingly around $3. The N1000 note alsocompares ratherawkwardly, for example, with the new Ghana Cedi which wasintroduced between2006-2007, with highest denomination of a 100 Cedi note, andexchanges today (2019)for about $20 after the exchange rate steadily depreciated fromthe initialGH₵100=$110 when the Cedi was redenominated.
So now that thehighest Nairadenomination of N1000 is presently just $3, a more robustcurrency profile thatwill truly reflect the cherished qualities of money (i.e.portability,stability in value, durability, acceptability, etc.) has becomenecessary. The ultimatechoice is now between Naira redenomination and the issue ofhigher valuedenominations of N5,000 and N10,000 notes. In contrast, theprofile of foreigncurrencies of US and UK has removed resilient for decades withthe highestdenomination of $100 and £100 respectively because inflationrate has largelyremained below 3 per cent.
The above title “The InevitableChoice BetweenN10,000 Note And Redenomination” was first published on August 15, 2016. The issues raisedtherein,unfortunately, still remain very resonant today. Please read on.
“Householdsacross Nigeria have become severely traumatized by escalatingprices of goodsand services. The uneasy feeling that one’s pocket, has beenpicked hasprobably become common after every visit to the market, wherethe smallest nylonsachet may be all that is needed to pack over N10,000purchase(s).”
“Inretrospect, in 1977, the highest Naira denomination was N20note, popularlyhailed as ‘Muri’ (because of its embossment with the effigy ofLate PresidentMurtala Muhammad); the N20 exchanged for the princely sum ofalmost $30; regrettably,however, after the serial devaluations which followed the IMF,inspiredStructural Adjustment Program between 1985-90, the N1,000 notewas issued asNaira’s highest denomination and it exchanged for just over $8in 2005. Sadly, afterthe Naira devaluation in 2016, the same N1000 presentlyexchanges for just about$3.”
“Invariably,kobo coins have become widely rejected because of theirworthless present value;consequently, the erstwhile secondary denomination notes of N5,N10, N20, N50,N100, now perform roles normally reserved for hard wearing,longer lasting,metal currency designed to facilitate change in transactions.”
“Nonetheless,if the Naira’s free-fall remains unchecked, and the Nairaultimately tumbles toN1000=$1, the N1000 note will, similarly, also assume theintensive role oflower denomination coins, despite its inappropriate fragilepaper fabric. Insuch event, even if N10,000 note is also issued as the highestdenomination, itwill, regrettably only exchange for $10. Similarly, new issuesof N2,000 andN5,000 notes will also exchange for $2 and $5 respectively.Clearly, unless thefundamental flaw in the pricing model that eternally produces aweaker Nairaexchange rate is addressed, annual inflation rates may climbwell beyond 20 percent and propel further Naira depreciation which may ultimatelycompel theintroduction of N20,000 and N50,000 notes, just as Ghana’scurrency profile in2006 included 50,000Cedi notes which, alarmingly exchanged forjust $5, before the4-point Cedi redecimalisation in 2006-7!”
“Although,the issue of N2,000, N3,000, N5,000 and N10,000 notes willfacilitate cash transactions,it will also challenge the cashless project, on which governmenthas invested tensof billions to implement. However, the relative success of thecashlessproject, notwithstanding, some critics may contend that, withrespect to MonetaryPolicy, the cashless project may be actually counterproductive, as theincreased velocity in moneycirculation, that it induces, also worsens an already subsistingincendiaryinflationary spiral! In other words, if for example, the same N1,000can be usedconsecutively in say 10 transactions in one day on the cashlessplatform, thiswould expectedly spike consumer demand and sustain a moreintense inflationarypressure, than if the same N1,000 could only be used in a singletransaction inone day.”
“Invariably,higher denomination Naira notes will facilitate portability, butthe facilitationof large cash transactions also poses a security threat.Instructively, however,higher denominations will be inevitable, if the continuous slideof Nairaexchange rate is not arrested. From a cost perspective, theissuance of highernotes may cost less, if the existing currency profile and designremain thesame, while the addition of N2,000,N3,000, N5,000 and N10,000 new notes will also be popularlywelcomed to replacethe increasingly ‘worthless’ and grimy lower denominations belowN1,000. Notably,however, as long as primary kobo coins remain worthless andrejected,competitive retail pricing will again be in huge leaps of N500and N1,000!”
“Alternatively,the need to restore value, portability and competitive retailbest practicewith the embedded usage of primary coins, may advise a 3-pointdecimalizationof the present Naira profile to drive these objectives. Undersuch arrangement,the current N1,000 note will be replaced with a New N1 note,while the existingN100 note will be replaced with a 10Kobo coin, so that theexisting N50 notewill become a New 5kobo coin; similarly, the present N10 willbecome a new 1kobocoin.”
“Instructively,the nominal value of all Naira incomes, whether salaries orrents and alltransactional balances, including bank balances will also beredecimalized bythree points. In the end nothing changes but the Naira profilewill become morecompact.”
“Insuchevent, one US dollar, will exchange for N3.05, in consonancewith thesubsisting average exchange rate of about N305=$1; however, ifthe Nairafurther dips to say N500=$1 before redecimalization, the New N5will exchangefor $1 and so forth.”
“Invariably,currency redenomination is a much more expensive undertakingthan thealternative of higher Naira note issues, because a redenominatedprofile willincorporate the whole gamut from kobo coin (old N10) to thehighest new N100=$305,with the inclusion of new designs for other standarddenominations in-between.”
Furthermore,redenomination would require longer production lead time andextensive publicenlightenment and campaign to facilitate adoption nationwide.
“Acompactcurrency profile would notably, provide digital margins forcompetitive retailpricing as kobo coins and lower denomination secondary coins andnotes becomereadily acceptable; in such event, the attrition caused by theshortage ofchange in transactions between petrol attendants, shop keepersand customerswill become minimized. Furthermore, the re-introduction of coinswith a greaterpurchasing value, will encourage acceptance and similarlyfacilitate trade withthe use of slot machines, which are commonplace 24hour dumbservice outlets fora wide range of consumables abroad. (See Articles titled “Redenominationof Ghana’sCurrency” and “Redenomination: Why& Why Not?”, published in the VanguardNewspapereditions of 15/01/07 and 17/09/07 respectively or visit www.lesleba.com ).”
“Advisedly,however,the heavy funding requirement for Redenomination and thecomplete overhaul ofthe Naira profile can be reduced, if the Nigerian SecurityPrinting and MintingCompany is appropriately upgraded to produce a substantial part,if not all thenew cash requirements.”
“Unfortunately,nonetheless, the underlying triggers of inflation and Nairadepreciation, willnot be neutralized by the mere issue of higher Nairadenominations or thecomplete overhaul of the Naira profile with redenomination.Consequently,unrestrained double-digit inflation rates and a Naira exchangerate, that is perenniallybeleagued by undeniable systemic surplus of Naira (excessliquidity) in CBNauctions, will inevitably, fuel a new cycle of currencyrejection that will,ultimately, demand these same options of higher currencydenominations orcomplete currency overhaul, in order to recreate a compactcurrency profilewhich will be accepted and also facilitate both transactions and the accounting process.
In The Spotlight
Finally, June 12 as a historically iconic date is official. It is no longer a mere symbol of what could have been. It is now encoded as a take-off date for the resurgence of the democratic experience in Nigeria.
And the credit goes to President Muhammadu Buhari, a man whose comrades-in-arms, led by Ibrahim Babangida had, in a streak of authoritarian madness, vitiated the peoples’ will in 1993. Whenever the injustice of June 12 is remembered, it will always be said that Buhari was the man who righted that wrong. History will be kind to him in this regard. But June 12, known euphemistically as the 26-year old pregnancy and national albatross, which has haunted the trajectory of Nigeria’s precarious democracy, can only get final closure if, and when Gen. Abdulsalami Abubakar tells Nigerians why he kept Abiola to die in detention while other political prisoners were released.
Without doubt, Nigerian democracy has come a long away. Most Nigerians who are old enough to remember the significance of June 12, hailed the decision of the Buhari administration to recognize June 12 as Democracy Day. Whether it was an obligatory atonement emanating from genuine contrition, or an expedient after-thought contrived for political reasons, Buhari’s conferment of the national honor, Grand Commander of the Federal Republic (GCFR) on Abiola, and his public apology to his family were acts of nobility and magnanimity.
Viewed as an act of statesmanship, the apology and multiple honors granted Abiola underlines the move towards appeasement, reconciliation and national unity. Buhari claimed the reason for the double honor rightfully granted the late Abiola was not “to open old wounds but to put right a national wrong.” To assuage the feelings of Nigerians and “recognize that a wrong has been committed,” the president made his offering: “This retrospective and posthumous recognition is only a symbolic token of redress and recompense for the grievous injury done to the peace and unity of our country. Our decision to recognize and honor June 12 and its actors is in the national interest. It is aimed at setting national healing process and reconciliation of the 25-year festering wound caused by the annulment of the June 12th election. I earnestly invite all Nigerians across our entire national divide to accept it in good faith.”
The travails of the prevailing democratic order make imperative the interrogation of what June 12 called Democracy Day is all about. Do Nigerians really appreciate what democracy means? Are Nigerian politicians making democracy worthwhile or perverting its content and process? Undoubtedly there are many Nigerians who have stories to tell about the great men and women who participated in those stirring events that culminated in the final stage when Gen. Olusegun Obasanjo was sworn-in as the third elected president of Nigeria. Perhaps the most significant actor in those events of 1998 and 1999 was Gen. Abubakar, the last serving soldier to hold the office of Head of State and Commander-in-Chief of the Nigerian Armed Forces.
Gen. Abubakar was known among his colleagues as a rigorously apolitical soldier. He joined the nascent Nigerian Air force in 1963 but crossed into the army in 1966, a move that proved to be quite fortuitous. He was a member of the military tribunal that tried and condemned the soldiers who staged the Gideon Orkar coup of April 22, 1990 - the bloodiest attempt to topple IBB. After that event, Abubakar faded from the news. In the wake of the annulment of the June 12, 1993 presidential election, Nigeria was grip by crisis. Abubakar played a significant role in installing Gen. Sani Abacha in power in November 1993. When Gen. Oladipo Diya fell suddenly in 1997, it was Abubakar’s turn to rise in the byzantine politics of the Abacha court. He became Chief of Defence Staff and Abacha’s de-jure second-in-command.
But Abubakar was not a favorite of the Abacha court. He had an uncanny ability not to betray his emotions and would rarely volunteer any comment during meetings. His trademark poker face like a ventriloquist confounded even his most ardent critics and detractors. After the arrest of Diya and the generals in the fake coup of 1997, many of the top generals who survived were falling over each other to deify Abacha. They knew Abacha wielded absolute power of life and death. Abacha’s sudden death in 1998 changed the power geometry in Nigeria forever. The military announced Abubakar as the new Head of State. In an unprecedented twist, the Chief Justice brought out the tattered 1979 Constitution to swear-in Abubakar as new military ruler. The five political parties that had hitherto unanimously nominated Abacha for President collapsed like a pack of cards. Chief Bola Ige had famously described the five parties as “the five fingers of a leprous hand.”
When Abubakar took office, he had to clear all the old files pending on the late Abacha’s desk. In one of the files, there was a letter addressed to Abubakar awaiting Abacha’s signature. The letter demanded Abubakar’s compulsory retirement which was to be announced on the date Abubakar was sworn-in as Head of State if Abacha had survived to that day. The irony was not lost him. He knew his offence. He had refused to wear the Abacha loyalty badge that many generals were wearing. He had told those who cared to listen that his loyalty was to Nigeria and not to an individual. Abacha died. Abubakar survived.
But Chief Abiola, the presumed winner of June 12 did not survive. By the time Abubakar took power, Abiola had been in detention for four years. He was kept in solitary confinement and seldom allowed to see the sun. The circumstances in which Abiola was being detained were surreal. Then UN Secretary General, Kofi Annan, was one of the last people to see him alive. Annan described how Abiola was watching the England-Argentina World Cup match on television without the sound when he entered the room. When Annan asked the guard to turn up the sound, he was told this was not possible.
When Annan greeted him, Abiola asked: “Who are you?” On hearing he was the UN secretary general, Abiola was overcome with emotion and kissed his hand. “What happened to the Egyptian [Boutros Boutros Ghali]?” he asked. Annan explained he had taken over the position in January last year. Abiola had no idea that the Pope had visited Nigeria and had pleaded for his release. He had only heard the day before Annan’s visit that Abacha, had died. He had been almost completely isolated from the world for nearly four years. Abiola said he had been allowed a radio in prison for his first month, but in mid-1994 was cut off completely. His guards refused to talk to him and he had stopped trying to get information from them. He had no newspapers and was only given two books - the Bible and the Qur’an.
Gen. Abubakar had asked Annan to get a written assurance from Abiola that, if released, he would not immediately declare himself president as a result of the 1993 elections. Abubakar feared massive disruption, with Abiola being hailed in the south, while the northern Hausa controlled the army. He wanted Abiola to support a period of transition until new presidential elections in which he and others could compete and Annan said Abiola appreciated much had changed since 1993 and he did not want to come straight out of prison into Aso Rock. But he was apparently reluctant to give a signed undertaking. Instead he opted to meet Abubakar and give his word. Instead he died on July 7, 1998.
Although many seem carried away by the prospects for national reconciliation, which the recognition of June 12, exemplifies, the deeper import of the injustice of the Babangida regime would be lost if the country doesn’t muster the courage to exhume and resurrect what certain quarters consider a fossil of Nigeria’s political history. Abubakar must tell Nigerians why he kept Abiola in prison, until he collapsed and died after drinking tea during a meeting with two US envoys –Thomas Pickering and Susan Rice. The US diplomats, who travelled with Abiola to a nearby hospital and watched as doctors tried to revive him, said Abiola was in a poor state of health after four years of brutal imprisonment. “He had some record of hypertension,” Pickering said. “Both of his legs were swollen and he showed them to us.”
For the record, upon taking office, Abubakar received a delegation of Afenifere, the Pan-Yoruba group led by Senator Abraham Adesanya. The meeting ended in an upbeat note as Abubakar promised to release Abiola and other political prisoners. Days later, Gen. Olusegun Obasanjo, Dr. Beko Ransome-Kuti, Kunle Ajibade, Chief Bola Ige, Mrs. Chris Anyanwu and Gen. Diya were all released. But Abiola remained detention. Even more shocking, there was no change of circumstances as Abiola remained in the same solitary confinement where Abacha’s Man Friday, Major Hamza Al-Mustapha, had consigned him.
Yet there was no apparent reason why Abiola was not released with the other prisoners of conscience. Abiola’s claim to power had been weakened by the destruction of the political structures that supported his mandate. The political parties, the national and state parliaments and elected executives were all gone. What sort of negotiation could be imperative that could not be done with Abiola as a free man? By the time of his sudden death, neither Abubakar nor any agent of his government had volunteered to see Abiola, talk less of negotiating with hm.
Gen. Abubakar delivered on his promise to return Nigeria to democratic rule in 1999, and for that the country owes him a debt of eternal gratitude. But he also owes the country an explanation why Abiola was still kept in detention after many of the leading political prisoners had been release. It is one secret he must share with Nigerians, 26 years after the death of the man who paid the ultimate price for the current democratic dispensation that Nigerians have enjoyed for the past 20 years. Until Gen. Abubakar breaks his deafening silence, June 12 as Democracy Day will remain a mockery of justice and atonement.
The continuous silence of Gen. Abubakar speaks to an unwillingness to confront the monstrosity of that great injustice, and constitutes an act of violence to the collective memory of Nigerians. Feelings might be assuaged, and emotions dissipated over June 12, but Nigerians in their minds and hearts remain open to revisiting this vexing national question of why Abiola was never released. The clamor for national reconciliation transcends the recognition of June 12 and if genuine honor is to be accorded to what June 12 symbolizes, Abubakar must address the hovering controversy; there must be investigation of persons or institutions; who were willfully culpable in the atrocities of the military junta. The assassination and unexplained disappearance of pro-democracy activists, journalists, human rights lawyers; the brutal murder of perceived enemies of the junta and the wanton destruction of property and deliberate incapacitation of opponents must now be brought to light.
This is an opportunity for all such acts of injustice hanging on Nigeria to be addressed, and all found guilty must face the lawful consequences of their actions. As a first step towards atonement, there should be a roll call of honor of all the victims of June 12, dead or alive. Most importantly, there is need for the dramatis personae, including Gen. Abubakar to come out and offer an unreserved apology to Abiola and other victims of June 12. This is necessary for them to make personal atonement and seek inner peace for the injustices perpetrated. Atonement and reconciliation are volitional for the attainment of peace; it can rarely be done on behalf of another, especially when the perpetrators are alive. The successful foreclosure of the June 12 controversy will only be complete when Gen. Abubakar tells Nigerians why he allowed Abiola to die in detention. The country deserves to know the truth.