Islanders Magazine

MIXED REACTIONS TRAIL INTRODUCTION OF 5,000 NAIRA NOTE

+ WHY RELIGIOUS LEADERS KEEP MUM

The shocking plan of the Central Bank of Nigeria (CBN) headed by Sanusi Lamido Sanusi to introduce a denomination of N5, 000 notes into the economy according to some experts was a wrong move regardless of the reasons adduced to it, without the important consent of the general public regarding such a plan.

A source who will rather remain anonymous reacted saying …."I am are yet to understand why the CBN reform programme takes it as a priority to call for large volume currency notes as planned, without recourse to the high level of poverty affecting the economy.

I am also deeply concerned, that the bank deliberately refused to dialogue with various stakeholders, whose trust in the exercise is important to acceptability and usage of such notes. The fact that it is the Central Bank of Nigeria makes it more important for Sanusi Lamido Sanusi to know that the Apex Financial institution is not his personal property hence the need to be cautious in taking irrational and ill advised decisions. The various chronic challenges of Nigeria are numerous, greased by the blinding scar of import dependent economy with endemic attitude of fiscal indiscipline especially from the public sector and by deficit financing from the Federal Government, corruption, insecurity, unemployment etc therefore, in the reality of all these unfortunate challenges, a N5, 000 denominated note should not be the priority of a policy response. Inflation at this time is not the antidote!"

Economics analysts stressed that against the backdrop of the CBN's campaign for a cashless policy, a high denomination note, in itself, creates a deviant option for the consumer to aspire to hold large value notes and hoard them.

Its introduction will on the other hand encourage more spending and aid corruption. The truth that the CBN needs to know is that if the country is going cashless, we should be reducing the denomination and not increasing it. Meanwhile, the assertion by the CBN governor that effort would be made to encourage the use of coins by liaising with government agencies, Banks, road transport workers, market operators, small businesses, supermarkets, vendors etc, if the N5,000 notes is finally introduced as proposed, it will be the fifth time in 13 years of introducing new denomination notes, which invariably accelerates the disappearance of low denomination notes and coins because they will become useless and engender an inflationary push.

Although the CBN act, Section 19 allows for the President to approve new currency note which he had done according to media reports without recourse to important public scrutiny and acceptance. However, we should not forget in a hurry that in 2007, Charles Soludo attempted a redomination which would have seen the knocking off of some zeros from the currency values but the then President late Umaru Musa Yar'dua disapproved it going by the objective public opinion against such policy.

Therefore, the President has been advised from some quarters to reconsider his approval of the proposal and call the CBN to order.

As bright as the idea may be by comparing us with Japan and Germany (better stabilized economies), the introduction of N5, 000 currency note is not a PRIORITY item for economic management at this time of our National life. It is the hope of Nigerians that the CBN will maintain consistent human face reforms to salvage the country’s economy and not to compound its woes.

Observers on the other hand are surprised that ever since the issue became a national issue no religious leader or supposed ‘Men of God’ had issued any statement or reacted towards the issue.Even the commendable Pastor/Activist Tunde Bakare have not said anything about the introduction of the controversial N5000 note. Some school of thought believes it might be an added advantage for them to be able to raise higher donations or offerings during church services.