A former Deputy Governor of the Central Bank of Nigeria, Dr. Obadiah Mailafia has disclosed that Nigeria has 20% fake currency in various denominations in circulation.
He gave this disclosure at a public hearing on 2017 budget proposals organised by Joint Committee on Public Appropriations at the National Assembly in Abuja.
Taking a prognosis on the effectiveness of this year’s budget, he warned that, it may take the country longer than necessary to come out of the recess, noting that it also had high interest rate element
“The fake currencies circulating means that they are not officially captured for monetary policies and its high interest rates could elongate recession period”, he said.
In his paper presentation titled: “Public Finance in the Context of Economic Recession: Innovative Options”, he said: “It was saddening that the concerned authorities appear to be oblivious of the gravity of fake currency circulation which he noted was highly detrimental to the growth of the economy.”
“When fake currencies of that magnitude circulate, original currencies become scarce, he said, noting that “bad money chase away good money”.
Attributing the current recession to several factors, Mailafia maintained that Naira also became weak due to gap in public policies.
Other factors he listed were poor banking practices, stock market crisis, speculations, regulatory failure, corruption and fraud and weak macro-economic management, while urging Executive and legislative arms of government to stimulate the economy.
He decried the operations of ponzi scheme (MMM) which he explained made people to withdraw money from Banks and invest in, stressing that it was risky to the banks.
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