Lagos — More reactions came yesterday from operators in the various sectors of the economy and the polity on the planned re-denomination of the naira announced on Tuesday by the Central Bank (CBN).

While many saw it as a welcome development, others especially the Action Congress (AC) dismissed it as retrogressive and called for its outright rejection.

MAN reacts

President of the Manufacturers Association of Nigeria (MAN), Alhaji Bashir Borodo, in his reaction to the CBN proposed re-denomination of the naira said the regime would not restore the value of the naira.

"Re- domination of the currency is not really the priority of the nation now. We don't think it will add value to the Naira," he said.

Manufacturers, according to him, however, applauded payment of federal and state governments from the Federation's Accounts in dollars. "It is a welcome development. The policy is in line with the whole idea of maintaining economic equilibrium, and invariably, they won't have to go to the banks for foreign exchange and pay commission or interest." he said.

It could affect export -- NECA boss

But the Nigeria Employers Consultative Association (NECA) in a cautious reaction said the new policy could make Nigeria's export expensive and less competitive and make import cheaper.

Director-General of NECA, Mr. Oshinowo who spoke in a telephone interview emphasized that "we need to wait and see how it works.

It goes beyond the celebration of the strengthening of our currency," he said, but warned that it could "negatively affect our export because it will make it expensive compared with products from elsewhere. It will make imports cheaper."

Extremely unnecessary --Oshiomhole

Former NLC president, Mr Adams Oshiomhole, described the move as an "extremely unnecessary interruption of the economy." He also condemned the decision to make N20 the highest denomination of the Naira. "What we need is higher denomination. We have 1,000 CHF (Swiss Franc), 5,000 Japanese Yen, yet Japan's economy is the most productive," he said.

Oshiomhole who spoke in a telephone interview said: "The challenge is to grow the economy and stabilise the exchange rate. The challenge is to attain high productivity matched by increase in income then the purchasing power of the Naira will rise over time.

This is a complete diversion," adding that the decision to artificially re-denominate the Naira may not be of benefit to Nigerians and the economy.

He said the policy announced by Professor Soludo was "a complete reversal of what Soludo stands for."

It won't affect naira value -- Les Leba

Mr. Henry Boyo, who writes the Les Leba Column for Vanguard, said revaluation won't add to the value of the Naira. According to him, the N1,000 per month may only be equivalent to about 800 or 900 dollars at a rate of N1.5 but will only strengthen the local currency. Mr. Boyo in his regular column in Vanguard had in the last one year called for the re-denomination of the naira and the sharing of the Federation Account in dollars.

Right step -- Don

Also speaking, Dr. Funso Omobitan, Head, Economics Department, Lagos State University commended the move, describing it is a right step in the CBN bid towards strengthening the naira. According to him, strengthening the naira will put more confidence on the currency, especially in the face of the ongoing proposal towards making the naira the major currency in the West African sub regional zone.

His words: "They just want to strengthen the naira. The value of the naira had been so bastardised in the past because they felt that market forces should be used in determining the value of the naira. They started from $1 to N3, to N10, to N15 up to N125 and so you've seen the consequence of it.

"The naira is valueless now. We need a lot of naira for one dollar. But now what the CBN wants to do is to strengthen the naira and bring it to its true value. By strengthening the naira, it means the economy is going to be buoyant. CBN wants to bring confidence back into the economy for foreign investors to come and invest in Nigeria.

As an investor, when you come to Nigeria to do business, automatically you know the exchange rate is in your favour unlike before when they will tell you they want to repatriate all their money in dollars.

"Usually, there are two ways to determining the exchange rate. You have the flexible exchange rate and you have the pegged exchange rate. What has been happening over the years is the flexible option that the market determines.

The other one is the pegged exchanged rate where the government pegged the exchange rate of the naira to other currencies at certain amount. That is what we were doing before the Structural Adjustment Programme (SAP). IMF then felt the naira was over valued. Why was it over valued? Because it was pegged at N1 to $1. The dollar wasn't even up to the naira in the 70's. So it is possible to peg it. It has been done before and it works."

Sack Economic Team now -- AC

The Action Congress (AC) in its reaction called for the sack of the Federal Government Economic Team, including CBN Governor, Prof. Soludo, for what it described as "a policy somersault that has resulted in the so-called re-denomination of the Naira."

In a statement, its National Publicity Secretary, Alhaji Lai Mohammed, said Soludo's inconsistency, which will lead to the dumping of the new currencies recently printed at huge costs to the taxpayer, would further deal the country's tottering economy a big blow. It also slammed the CBN boss for misleading the nation by tagging the planned change re-denomination, when what the bank has actually done is decimalization.

The party said the re-denomination was not even Soludo's original idea, saying a team of independent economic experts presented it to the economic team of which he is a member over two years ago. He rejected it then, only to embrace it two years later without even acknowledging those who originated it.

"Re-denomination comes when you have hyper-inflation.But this Voodoo Economic Team, the so-called Whiz-kids with whom we were saddled by former President Olusegun Obasanjo, has told us that inflation has been going down over the years. So why re-denominate?

It tallies with my position --Ayere

Managing Director/CEO, UBA Global Markets, Mr. Sonnie Ayere, told Vanguard that the move tallied with the position he had personally been canvassing since 2005.

He said that the move would have a great impact on the psyche of the people. "One of the problems leading to capital flight was because of the fear of depreciation. By bringing Naira to its true value, it will help to reduce capital flight," he said, noting that until now, expatriates were only interested in quickly repatriating their monies abroad, but with the new development, that would be unnecessary.

No impact on naira value --Adedipe

Also speaking on the development, Dr. Biodun Adedipe, Chief Consultant, B. Adedipe Associates Limited, said: "The move has no particular impact on the real value of the Naira and no direct effect on inflation. He said the impact was essentially psychological in the mind of the people.

"It's nothing really harmful, but it also has no fundamental impact in the real sense. The effect is just nominal but does nothing on the real value of the Naira."

Adedipe, an economist, who is also a consultant on FSS 2020 Project, however, said the move was an expensive venture. "We can now begin to ask ourselves why in the first place did we introduce higher denominations, because if N20 currency note will be the highest denomination, it means N50 notes and above will be scrapped. This will amount to a colossal loss of resources," he said.

Nwosu hails CBN

Mr Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), in his reaction, commended the CBN for the planned restructuring of the country's currency.

He said: "I think the re-denomination of currency to lower notes will restore the real value of our money provided other macro economic variables are tackled to give the desired effect.

The re-denomination of the naira will boost investment in the capital market. The pricing of stocks would not be compromised. Some stocks would no longer be overvalued or priced and with the strong value of our money foreign investors would be enticed to invest in our market.

...Senator Adeyemi too

Senator Smart Adeyemi, however, welcomed the plan for the re-denomination of the naira, saying it would save the country from a possible revolution against those he described as the "oppressive millionaire class." Senator Adeyemi, Chairman, Senate Committee on Federal Character and Governmental Affairs, said "the plan would also increase the purchasing power of the naira and give the national currency the respect it once had.

"It will reduce the number of millionaires and contain the millionaire class to a manageable number. It is oppressive and abusive that everybody is claiming to be a millionaire in a situation where millions cannot guarantee their three square meals," Senator Adeyemi, one-time President of the Nigeria Union of Journalists (NUJ) said.