Last week, the Governor of the Central Bank of Nigeria,
Mallam Sanusi Lamido officially announced the restructuring of the denomination
of currency in Nigeria i.e Naira notes. It is trite knowledge that the Laws of
the Federation fully empowers CBN to carry out such restructuring of the
currency from time to time, for the economic benefit of the country. However,
this act by the CBN to introduce a new higher note of #5,000, has generated an
outburst of divergent views from Economic and Financial experts, to the common
man on the street.
THE PROS OF THE
#5,000 NOTE
The CBN as usual, has assured us that the public outcry of
hyper-inflation as a result of the #5,000 note is baseless and unfounded;
The CBN Director of Corporate Communication, had this to say
“I have heard that the introduction of the #5,000 note will
bring inflation. I challenge anybody who is an economist to tell me an economic
theory that says when you have a higher denomination in your pocket, it will
change the way you spend. ”
Supporting this view, the President of the Association of
National Accountants of Nigeria said,
“Looking at it from the macro-economic aspect of it, it will
not FOR NOW produce outright
increase in inflation” {Emphasis mine}
{I’m just laying the
facts for you to judge which argument holds water and which does not}
THE CONS OF THE
#5,000 NOTE
There is a popular saying in the Soccer world that “Every
Nigerian is a coach”, so don’t mind how beautifully coined Nigerians have
criticized this #5,000 note, though with sound reasoning;
Prof Ademola Oyejide in his analysis about the proposed
#5,000 note in one of the dailies had this to say,
“The introduction of a #5,000 note may be a step in the
wrong direction, and down a slippery slope towards hyper-inflation. It is
clearly time to abandon failed inflation control policies and inadequately
thought –through experiments”
The punch ‘Salvo’ reported Economist and Former Vice
chancellor, Onabisi Onabanjo University, Prof Afolabi Soyode as saying
“Apart from the transaction motive of holding cash, I cannot
see the initiative as reasonable. The existing structure is okay and as a
matter of fact, if you want to discourage the use and carrying of cash, then
what is called for, is to reduce from #1,000 to #500 not to increase to
#5,000”.
A common man’s view
“I keep on wondering about the future of this country. I was
disappointed when I heard the report that the Central Bank of Nigeria was planning
to spend #40 billion on the printing of the proposed #5,000 note and #5, #10
and #20 coins. They should use the fund to enhance security and provide
education and jobs”
Be that as it may, the Senate has said it plans to suspend
the introduction of the #5,000 note because its approval was not sought by the
CBN before announcing it, not because it approves or disapproves of it.
I’ll plead with the Senate, to mandate the Governor of CBN
to give a straight and simple answer to the question that bear on the lips of
majority of Nigerians “how does one correlate the cashless policy
with the emergence of the #5,000 note, simpliciter, how can the cash less
policy work hand in hand with the #5,000 note?” {Me na my own be dat}!
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