A former deputy governor of the Central Bank of Nigeria (CBN), Dr Obadiah Mailafia, has lamented that 20 per cent of the currency circulating in the country is fake.
He said this at the National Assembly on Monday, while delivering a lecture at a public hearing on the 2017 budget.
Mailafia said it would be impossible to bring down food prices with fake currency in circulation.
“Twenty percent of currency circulating in Nigeria is fake; you can’t bring down food prices if you have fake currency circulating,” he said.
Mailafia said, apart from the foreign exchange crisis, the refusal of CBN to effectively regulate commercial banks contributed to the recession in the country.
“I am a former deputy governor of CBN, so when it comes to regulations, we could have done better,” Mailafia said.
“If you have recession, you have to open a situation room, where experts will be monitoring the economy daily. These experts will work on ways to get the country out of the situation.”
He advised the authorities to take concrete steps to prevent the naira from plunging “down forever”.
“If nothing is done, the naira will continue to plunge down forever,” he said.
“This is where boldness in economic policy is needed. Though the current administration inherited recession, Nigerians expect them to tackle it. That was what the Obama administration did. We need stabilisation of the exchange rates.”
He advised that the budgetary process should be structured in a way that would ensure rapid economic recovery.
Meanwhile, a source close to the apex dismissed Mailafia’s assertion, saying he has no empirical evidence to prove his claim. “What study did he conduct before arriving at such conclusion? What he is saying is that if you withdraw N1million from your bank, then 20 per cent of it, which is N200,000 is fake! That is not possible”, the source, who did not want his name in print, told Daily Sun.
But, a former banker, Mr Tope Ogundipe, threw his weight behind Mailafia’s assertion. According to him, most of the Naira notes that find their way into the banking halls do not pass through proper channels. “As a former Deputy Governor of CBN, Mailafia must have been sure of his facts before saying so. He knows that CBN keeps the records of how much money it pushes into circulation at any given time.
So if the amount in circulation exceeds that, then where does the extra ones come from?That means they are fake”.