BY AUGUSTINE E. AKHILOMEN
“Economy is the basis of society. When the economy is stable, society develops. The ideal economy combines the spiritual and the material, and the best commodities to trade in are sincerity and love.” Morihei Ueshiba, A famous martial artist and founder of the Japanese martial art of aikido.
It is no longer news that Central Bank of Nigeria under the Governorship of Dr Lamido Sanusi has decided to introduce what will be Nigeria’s highest currency denomination in the nation’s economy as a way of consolidating on their self plan economy, policies that has either affected the general standard of living positively or negatively.
At a point when we expect the Nigerian government to buckle up their shoes in a bid to tackle the spate of bomb blasts in some parts of the country by the dreaded Boko Haram sect members, who have suddenly become a big threat to the national security, they’re busy idealizing and sitting in the comfort of their homes taking decisions that could make or mar the nation with time.
According to the Governor of the CBN, Sanusi Lamido, he said that the plan is aimed at enhancing the quality of banknotes, incorporating a more effective feature for the visually impaired as well as reduce cost of production, distribution and disposal of banknotes without increasing inflation.
On the 28 of November 2011, the CBN board considered and approved the new currency structure. It subsequently sought and on 19 December 2011 obtained the approval of his Excellency the President, Dr Goodluck Ebele Jonathan (GCFR), Mr Sanusi said.
Under new structure the existing denomination of N50, N100, N200, N500 and N1000 will be redesigned with added new security features.
It is our pleasure to tell you that a new high currency denomination will also be introduced. It is the N5000 note.
In the same vein, the lower bank notes of N5, N10 and N20 will also be coined.
Consequently, the naira currency structure will now be 12. These are six coins and six bank notes denominations.
He continued: “It has been argued that the introduction of a higher denomination banknote could exert inflationary pressures in the economy. Inflation in Nigeria is a monetary phenomenon. Secondly, in some countries such as Singapore, Germany and Japan, the highest denominations are 10,000 SGB, €500 and 10,000 yen, respectively.
These denominations have relatively high dollar equivalent. The levels of inflation are, however, low at 2.8 per cent, 1.1 per cent and -0.7 per cent, respectively as of 2010.
Furthermore, we believe that the introduction of a higher bill will complement the bank’s cash-less policy, as it will substantially reduce the volume of currency in circulation, particularly in the long term.
This may be a good innovation in the right direction however, it’s quite uncalled for considering the fact that, during the introduction of 1000 naira note, coins were also introduced but later vanished after some time.
In all honesty, is the Nigerian government trying to complement the cashless economy policy with the introduction of the #5000 note in a bid to ease the flow of cash in our society? Or do they intend sanitizing the state of our monetary system from collapsing drastically?
If going by report from other sources that the Central Bank of Nigeria will spend N40.3bn to produce its new coins and naira notes. Out of the amount, N11.8bn will be spent on the new N20, N10 and N5 coins.
Then, we ask. Can’t we re-invest this over excess fund on other important things in our society that will be of great benefit to our people?
Although there have been different reactions to the introduction of the #5000 note by the Central Bank of Nigeria, where some believe that it won’t bring about inflation or hardship in the economy. However, the Nigerian government should put the masses in consideration in whatsoever decisions they make.
Director General, Lagos Chamber of Commerce and Industry, Muda Yusuf in his comment said although the idea of restructuring the currency is a welcome development, there is a flip side to the policy.
The risk of counterfeiting increases with denominations. The higher the currency denomination, the higher the risk of faking and this is something to also worry about, he stated.
On the other hand, Yusuf argued:This would mean that the use of Ghana must go bags would no longer be necessary to move large amounts of cash.
The new currency restructuring initiative of the CBN is a step in the right direction. It should be seen as a policy response to current economic dynamics. I believe the introduction of higher denomination of N5, 000 would reduce the volume of cash needed for transactions in the economy. This, by extension, would reduce the cost of currency management “ printing, movement, storage and distribution. For instance a N1 million transaction would normally require 2000 pieces of N500 notes or 1000 pieces of N1000 notes. But with the introduction of N5000 notes, only 200 pieces would be needed. This is a significant reduction in the volume which offers tremendous convenience for those who have cause to handle large amounts of cash.”
In the views of President-General and Secretary of the Trade Union Congress, Comrade Peter Esele and Chief John Kolawole, said: We are surprised that the CBN could at this time decide to embark on the mission to make changes to the nation’s currency and to also create a N5, 000 denomination. The intention of coining the N5, N10 and N20 denominations does a psychological damage to the value of the Naira. We are surprised that despite CBN’s acquiescence to this, it still intends pushing forward with this objective.
If the objective is truly the pursuit of a cashless economy, why would the CBN consider it too expedient at this time to also pursue concurrently the printing of more currencies especially the jumbo N5, 000 note?
It should be remembered that the CBN has changed the face of the Naira severally in the past years, mouthing the same arguments which have all proven on the long run to be baseless. We see this rather as a sign of a monetary system management gone awry and the deeper malaise of the continued wrong “ headed management of the nation’s foreign exchange receipts.
We therefore call on the CBN to immediately suspend this pursuit, allow it to be discussed nationally as our experience has shown that the outcome of this will affect majority of Nigerians adversely before any further action is taken. We would also want the CBN to tell Nigerians what it will cost the tax payers to move to this new currency regime.
How best can we describe this new development that will soon become a reality in a country where one-third of her citizens are still wallowing under abject poverty on a daily basis without any concrete plan to alleviate their despair and suffering?
Have they ever taken a walk round some streets of our federation in the wee hours of the day to witness how people who should be regarded as the first citizens of their country, are made to go through unnecessary hard labour all because of the need to make ends meet?
The standard of our education is decaying at every given year without a solution to it in sight. Our health care and transportation system has been reduced to nothing but a shamble. Yet, we endure in the face of serious pains and hardships. In fact, it looks as if nothing seems to be working in our country.
Despite the diverse opinions on the above issue, it is very certain that the introduction of the #5000 naira notes will bring about an increase in the corrupt attitudes of some of our political office holders and other sectors of the economy irrespective of their status.
With this, it will therefore create an easy forum to embezzle our funds in a systematical manner without any traces. Note this, no more Ghana-must-go-syndrome.
In the same vein, it will also affect the price of commodities in the market which in turn will have drastic effects on Nigerians in the long run, which brings about inflation in the country. There will also be the case where the purchasing power of commodities will start from #100 thereby condemning the effective use of N5, N10 and N20 coins in the market.
More so, the risk of encouraging hungry criminals in our society may rise as a result of the introduction of #5000 note, in the sense that, some lazy Nigerians might see that as an opportunity to intensify their game plans, knowing fully that a lot of Nigerians might prefer to store cash at home or office rather than using the bank. After all, 50 pieces of #5000 note will amount to #25000, which even makes it more convenient and easy to move about or store at home without any problem.
In fact, the rate of armed robbery may escalate owing to the fact that money may be a daily mobile activity in our society, which directly or indirectly poses a great risk for us.
If the Nigerian government would assure that the introduction of the #5000 note into circulation will not account to any of the aforementioned points below, then it will be a massive development to the economy. However, if their intentions are different, then, they should delay their plans in the best interest of Nigerians, who may be at the receiving end of it.
Finally, the Nigerian government in their best knowledge should endeavour to bring smiles to the faces of Nigerians, by putting all aspects of the economy in proper shape, in a bid to create a brighter and better tomorrow for our generation and the ones to come.