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Last Updated: Friday, 24 August 2007, 23:25 GMT 00:25 UK
Nigeria freezes currency change
By Alex Last
BBC News, Lagos

The Nigerian new currency, the naira
The new banknotes will have to wait for another launch date
Nigerian Justice Minister Michael Aondoakaa said he is freezing a plan to re-denominate the Nigerian currency, the naira.

The plan had been announced by the governor of the Central Bank, Chukwuma Soludo, last week.

Mr Aondoakaa said the plan was frozen because President Umaru Yar'Adua had not given his written permission.

The case has raised questions about the effectiveness of the leadership of the new president.

Ten days ago amid much fanfare, Mr Soludo told an audience of hundreds of dignitaries that the naira would be redenominated.

It was a big move, which was not universally popular, but straightforward enough, it would seem.

Now, bizarrely, Mr Aondoakaa has told reporters that for now all plans for the re-denomination are frozen.

"I, as the chief law officer of the (Nigerian) federation, hereby stop all actions on the re-denomination of the naira," said the minister.

A spokesman for the Central Bank said in response there had been consultations with the president about the plan before the announcement.

Political fallout

Either way, the fact is this is a major humiliation for Mr Soludo and there is growing speculation that politically he will not survive this debacle.

Nigerian President Umaru Yar'Adua
President Yar'Adua is not known for his hands-on leadership

As head of the Central Bank for the past few years, he has overseen major banking reforms in Nigeria.

But just a few weeks ago the country's new President, Umaru Yar'Adua, chose Mr Soludo's deputy, not him, for the job of finance minister in the new cabinet, and the central banker has been dropped from the government's economic team.

This whole episode also raises questions about the leadership of the new president.

He is said to be quite hands-off in his style of government, especially in comparison with his predecessor.

After this, some will argue that state of affairs might have to change.



SEE ALSO
Nigeria set to free its currency
14 Aug 07 |  Business
Nigeria to end bulk of $500m debt
02 Mar 07 |  Business
Nigeria settles Paris Club debt
21 Apr 06 |  Business

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