THE plan by the Central Bank of Nigeria (CBN) to introduce a N5,000 note as part of a major  restructuring of  the country’s currency, has been a subject of extensive controversy.  Under the plan announced by the Governor of the CBN, Mallam Lamido Sanusi, on Thursday, August  23, 2012, the present  N5,  N10 and N20 will be converted to coins while the existing N500, N200, N100 and N50 will be redesigned with new security features.  This, according to Sanusi, is in consonance with international best practices which require monetary authorities to review their nations’ currencies  at intervals of between five and eight years to address weaknesses and other challenges. The production of the new note and coins are scheduled to  be put into  circulation early next year.  

THE outstanding and contentious component of the restructuring is the introduction of  a N5,000 note to which there have been different reactions predicated on different premises. The argument has been advanced that since N5,000 is only $30, there should be nothing wrong in Nigeria having it in circulation. There has, on the other hand, been a preponderance of views that the issuance of N5,000 note  will aggravate the problem of inflation in the economy.  The endorsement  of the  project by the Economic Management Team (EMT) and the approval of the President since last year December  constitute ample evidence that the printing and circulation  of N5,000 note is already a fait accompli.  Sanusi has thus only brought a  concluded matter to the notice of the Nigerian public.

THE two chambers of the  National Assembly, the labour movement, groups, associations and individuals  have faulted the plan to introduce N5,000 into the economy.  While we do not subscribe to the view that  a currency note of that denomination will fuel inflation, we equally find untenable the arguments of the CBN to justify the introduction of the new note.  It has become a way of life for Nigerian public officials to  take refuge under  “international best practices” when they cannot cudgel their brains to find cogent reasons for their self-serving actions.  

WHAT are the features or elements of these “international best practices” that necessitate the introduction of a N5,000 note in a country in which the  vast majority of the population live on less than two dollars a day?  What are the defects in the existing  currency notes which the issuance of a N5,000 will correct?  What positive changes will the N5,000 note bring to the country’s economy?  It is already being suggested that the CBN should embark on an enlightenment campaign to allay the fears of Nigerians on the bank’s questionable project.  A similar campaign  that was carried out to convince Nigerians to accept the withdrawal of the so-called subsidy cost hundreds of millions of naira only to be followed  by the revelation of the truth that a substantial percentage of the much-hyped subsidy ended up in private pockets.

ONE oft-recurring question to which the CBN  has not offered a convincing answer is on the compatibility  of a cashless economy with the introduction of a N5,000 note.  To ensure a drastic reduction in the volume of cash transactions, the CBN has placed a ceiling  on the amount of money both individuals and corporate bodies can withdraw per day.  Any amount in excess of the withdrawable sum will attract a punitive interest.  This is to discourage the  movement of  huge  amounts of cash and  reduce the associated incidence of armed robbery. The question that now arises is:   how reconciliable  is such a policy with the printing of a N5,000 note that will make it possible and easy for any individual to carry  millions of naira on his  person?  With N5,000 notes in circulation, it should not be lost on the CBN that armed robbery attacks on prime targets will become more ruthless and the felons will be getting away with bewildering hauls of cash from any successful operation.

NIGERIANS are also being told that the N5,000 note will not be widely circulated.  What this means is that the new note will be produced for the exclusive use of a special class – the mandarins and the politicians together with their minions and acolytes.  There can be no doubt that the new note, when put into circulation, will facilitate the despicable practice of money politics as politicians will be able to carry money about with greater ease than ever.  Is this the CBN’s definition of public interest on which a whopping amount  of public funds will be expended?

THE National Assembly should see the N5,000 note issue as a  serious challenge.   The CBN has been operating as a law unto itself because the lawmakers have not been able to muster the will to rein it in.  They succumbed to cheap sentiments in their bid to effect an amendment in the CBN Act.  The time has come for them to reopen the debate on the proposed amendment which they have put in abeyance.  The absolute freedom being enjoyed by the CBN is unconscionable and should be curtailed.  Its budget should be subject to legislative approval.  Its  board should be reconstituted with an outsider and not the Governor as the chairman as in other government establishments.  The number of  CBN officials on the board should be reduced to check  manipulations and abuses.  For as long as its Act  remains as it is, the CBN will remain ungovernable.  The apex  bank  should have the freedom to take professional decisions on purely  monetary issues but its present powers should be drastically curtailed.  

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ON THE 5000 NAIRA NOTE
written by ADA O.O., September 13, 2012

Mr President, I pray that God will grant your wife quick recovery in Jesus name, Amen! I want to comment here on the issue of the 5000 naira note. Pls sir, do not permit it. It will ruin our economy and put the poor masses into more hardship. My reasons are these:
1. If you look into the history of Nigeria in recent times, you will discover that Nigerians don't like coins. Whenever any money is changed to coin, that money goes out of circulation. And this is what is going to happen. Where is the one naira and two naira coins that were introduced. Now the CBN governor wants to convert 20 naira and below to coin. This means that these moneys will go out of circulation and the least money in circulation will be 50 naira note. And this imply that a poor man who gives his child five naira and ten naira for biscuit will then be forced to start giving the child 50 naira for biscuit from his low income and poverty. I must tell you the truth, everything we are selling for 5 naira now will become 50 naira as the coins disappear from circulation and this will lead to inflation and the poor will suffer.

2. Most of the rich men and politicians supporting the 5000 note issue are only looking for means to carry their millions in a small portfolio. They don't have the masses in mind. By the time the 5000 naira note is introduced, a small Ghana-must-go bag that can contain/carry only one million naira before, will now be used to carry five million naira conveniently. And since they deal with millions of naira, unlike us the poor masses, they are looking for what will satisfy their selfish motive.

3. If you take a good statistics from the currencies of the various countries in the world, you will find out that the countries with the worst economy in the world today are countries with higher currency note (e.g Zimbabwe). And if we are not careful, Nigeria may be heading towards that. Our currency will be devalued, weak and maybe a dollar will start exchanging for 500 naira. Also, another CBN governor may come later with the proposal for 10,000 naira note, 20,000 naira note, 50,000 naira note and so on.

Based on the aforementioned facts, i would like to beg Mr President for the sake of the poor masses, that this issue of 5000 naira note should be nullified. All we should do now as a nation is to strengthen our industrial sector and agricultural sector, So that we can start exporting our products to other countries and reduce importation to the barest minimum. This will strengthen our currency and economy alike.
THANKS

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