Despite the outcry and protest of concerned Nigerians the introduction of N5000 note into the nation’s
money market, President Goodluck, Aliko Dangote and other top Nigerians nod to the entry of the high currency.
The National Economic
Management
Team (NEMT) – a conclave of some senior government officials and
prominent businessmen – also blessed the idea, following a briefing by
Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi.
Meanwhile, the National Assembly has asked the CBN to pull the
brakes on the proposal – for now.
But
NEMT argued that it was the primary responsibility of the CBN to effect
changes in the nation’s currency with the approval of the President.
The
economic team also allayed the fear that the note will heighten
inflation, saying that there is no link between inflation and currency
denomination.
Besides, the group argued that the introduction of
the higher currency will help shore up the naira’s value as most people
who store money in hard currency will now embrace the high
denomination.
The NEMT, which is headed by the President,
comprises the Minister of Finance and coordinating Minister for the
Economy, Dr. Ngozi Okonjo-Iweala, Sanusi, Minister of National Planning
Dr. Shamsudeen Usman, Director General of the Security and Exchange
Commission (SEC), Director General of the Bureau for Public Enterprises
(BPE), one representative each of governors of the South and the North
as well as key private sector players.
Usman spoke at the end of yesterday’s NEMT meeting presided over by President Jonathan.
He
explained that contrary to criticisms that the introduction of the N5,
000 notes will bring about inflation in the economy, the new
denomination according to him, will rather assist in big
business transaction.
The note, he said, will not be high in circulation but will be used mostly by the banks.
His words: “Clearly, the N5000 note will not lead to higher inflation. There is absolutely no link. I am an
economist; I have been deputy governor (Operations) of the Central Bank.
“During
the last review of the introduction of N1000 note and the various
coins, I was deeply involved; it was my responsibility at the Central
Bank.
“There is absolutely no link between inflation and the currency denomination.
“So,
obviously, the discussion today was basically to endorse.
“Mr.
President had already approved; that is the only requirement by law.
The CBN is to propose and Mr. President is to approve. And since Mr.
President has approved, really, what is important is to just explain.
“I
personally had some concerns about the coins but since some discussion
with the CBN governor, he has actually clarified that even the media
didn’t understand. The coins are being introduced on an introductory
basis so that if people accept them and are using them, then gradually
they will withdraw the other notes but they will run concurrently with
the notes. Those were my concerns, initially, because you remember
during my time in the CBN, we introduced the one naira and two naira
coins.
“Unfortunately, they were not utilized at all. Part of
that is really the value of one naira and two naira today; what can you
buy? So because they are higher denomination, they may be accepted.
“I
think even that aspect didn’t come out well in the communication and so
the CBN is going to communicate to Nigerians that the coins will run
concurrently with the note. They are like testing the waters; if they
get accepted and are being utilized, only then will they take subsequent
actions.”
Atedo Peterside, a banker and NEMT member argued that besides the fact that it does not add to increase in cost of
printing of currency, money, being a store of value, the higher the denomination, the better it is for the economy as those who
made money legally and illegally will want keep their loot in naira rather than hard currency.
He
said: “If I were the CBN governor, I will prefer to print N10, 000
notes. Last year, Nigeria spent N47billion to print these small, small
notes. If we were printing bigger denominations, we will print fewer
number and you make phenomenal savings. Secondly, money is a store of
value, all these thieves, rogues and vagabonds running around in various
states and all over the country, when they steal money, they will want
to keep it outside
the banking system.
Access Bank Managing Director Aigboje Aig-Imoukuede described the reactions trailing the N5000 note as unfortunate.
He said: “It is very rare for you to have a central bank that does not look at the issue of currency management
and issue new notes from time to time based on the reality of the
economy. In the case of Nigeria, our economy is such that a N5000 note
which is in effect a $30note is not strange.
“The greatest
argument I have heard about is causing of inflation; the other argument
is that it will cost money to introduce the new note. There is no
relationship between
the issuance of higher legal tender and inflation. It is unfortunate
that some have misled people into thinking that it will lead into higher
inflation.
“Every central bank by the nature of currency management will issue new notes
all the time. So, printing of notes is an ongoing operation that every central bank engages in.
Frontline
businessman Alhaji Aliko Dangote said: “The introduction of the N5000
note has nothing to do with inflation. I think it is even to protect the
economy. The cost of printing is not anything different from
the amount they are using in printing any other note. It is the same cost.
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