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  • Is this the end of N5,000 note?

    Is this the end of N5,000 note?

    On December 19, 2011, the Central Bank of Nigeria (CBN) proposed and obtained the approval of President Goodluck Jonathan to embark on the currency restructuring exercise, codenamed ‘Project CURE’.

    On August 23, CBN Governor Sanusi Lamido Sanusi announced the new denomination of 5,000 naira bill. He said it would help Nigeria’s economy by providing a “befitting currency structure”.

    Under the new structure, the existing denominations of N50, N100, N200, N500 and N1,000 will be redesigned with added new security features while a new high currency denomination, N5,000, will be brought into circulation.

    Sanusi explained that the lower banknote denominations of N5, N10 and N20 would be coined, meaning that naira currency structure will now be twelve- six coins and six banknotes.

    While the coins will now be 50k, N1, N2, N5, N10 and N20, the banknotes will be N50, N100, N200, N500, N1,000 and N5,000.

    But there was a lot of public outcry against the planned introduction of N5,000 banknote, with some saying it would fuel inflation, aid corruption and that it was at variance with the CBN’s cash-less policy that de-emphasises the use of cash.

    The apex bank and some economists said it would not cause inflation because the amount of money in circulation would not increase.

    On September 6, former president Olusegun Obasanjo said the N5,000 would cause inflation and kill production.

    On Septmeber 12, Sanusi replied Obasanjo, saying the ex-president is a good farmer but a bad economist.

    On September 18, the House of Representatives and the Senate asked President Jonathan to stop the N5000 banknote.

    On September 20, President Jonathan eventually directed that further action on the approved restructuring exercise be stopped.

     

  • Advocates, opponents of N5,000 note

    Advocates, opponents of N5,000 note

    •Gen. Olusegun Obasanjo

    “The way Sanusi was fighting inflation by removing money from circulation was improper…, as this approach would kill production and affect small businesses negatively.”

    •Gen. Yakubu Gowon

    “The production of the N5,000 by the CBN will surely cause devaluation of the country’s naira.”

    •Alhaji Aliko Dangote

    “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.”

    • Information Minister Labaran Maku

    “I believe we should allow CBN to have leadership on this issue. This is not an opinion poll debate but a technical matter and the heated debate will not help in the management of our economy.”

    •Sanusi Lamido Sanusi

    “We are in an interesting country because my uncle or my father, who is our former Head of State, Gen. Obasanjo, you know he is a very successful farmer, but he is a very bad economist. He says that this higher denomination will cause inflation and improve hardship.

    “Gen. Obasanjo did N20, he did N100, N200, N500 and N1,000. He introduced higher denominations in Nigeria than any other head of state. He did a N100 note in 1999, he did N200 in 2000, he did N500 two years later and in that period inflation was coming down because it was accompanied by prudent fiscal and monetary policy.

    “For somebody (Obasanjo) who had done this to stand up and say introducing a higher denomination will cause inflation must be an empirical, most important determinant of inflation in our country given the number of notes he had printed.”

    • Managing Director, IRIS Consulting, Richard Obire

    “The policy may spur demand for wage increase. CBN is further devaluing the naira as there is a direct relationship between higher bank notes and devaluation.”

    •NLC Vice-President Issa Aremu

    “The policy would raise inflation and further pauperise the common man. It also contradicts CBN’s cash-less policy and raise corruption level in the country.”

    Chairman, Senate Committee on Banking Bassey Otu

    “This type of action is only taken where there is a major currency crisis and the CBN must be careful not to send a wrong signal to households or the domestic sector, or even the external economies that the Nigerian currency is valueless, which, I believe is definitely not and that for every unit of value, they need to carry a large quantity of cash.”

    •NBA President Okey Wali

    “The introduction of the N5,000 note should not be imposed on Nigerians.”

    •Atedo Peterside

    “Money is a store of value. All these thieves, rogues and vagabonds running around various states and all over the country when they steal money will want to keep it outside the banking system, so they need higher denomination notes.”

    •Hon. Jones Onyereri

    “The House would not support any policy that would further impoverish Nigerians.”