N5, 000 Note: Do We Need It? 

By Yangeh Dueh-Richardson

The Apex Bank shall introduce 5,000 Naira 

"The Apex Bank shall introduce 5,000 Naira note to the Nigerian polity from the beginning of 2013." That is not from me, it is from Mallam Sanusi Lamido Sanusi, the Governor-General, sorry the Governor of Central Bank of Nigeria (CBN).

 In addition to what is already a life threatening blow to the Nigerian economy, "the N5, N10, and N20 shall thenceforth be converted to coins". When I heard this, I could only say somebody must be demented.

It is either the CBN Governor or whoever it is that allowed such a piggy thought to enter their brain, and for opening their lips to spill out this vomit in the name of policy formation for the economy.

Or maybe it is the presidency that has consistently and continuously shown how incapable it is in steering the country that is demented. Otherwise, why would the president give the CBN Governor the go ahead to pursue this stupid, idiotic and nonsense idea of N5000 note.
 

May be it is me that is demented and that is why I am seeing fault lines in this N5000 note as well as the N5, N10 and the N20 coin issue.
 

In other to justify this line of thought, the CBN governor is quoted to have advanced several water tight reasons. Water tight indeed, he should have gone for air-tight reasons instead.
The CBN governor anchored his argument for a higher denomination on the need to complement the cashless policy, as it would drastically reduce the volume of currency in circulation.
 

I see this as a very lame and thoughtless argument. A higher denomination will rather encourage the use of cash and not the cashless economy as is insinuated by the CBN boss. Take an example; suppose a businessman is to pay a million naira for goods; if the there is the N5000 note, he needs just two hundred pieces. This is just two packs of the N5000 notes, this can be easily carried in ones trouser pocket.

 Consider however the same businessman who has only the N100 notes available. He will need 10,000 pieces. Even a mad man knows that 10,000 pieces of naira notes is too bulky to be carried around, as such he will be forced to use an electronic means of transfer. 

This is simple logic, yet I wonder how the acclaimed intelligent Sanusi didn't or can't get it. May be he just refuses to see it.
 

Another issue is that, majority of Nigerians, about 70 percent live on less than a dollar (N161) a day. If truth be told, only less than 10 percent of the Nigerian population will have need of that N5000 note. What then is the sense wasting the nations scarce resources to mint money that would be useful to just a handful. That would be wastage. Nigeria ideally do not need more than N100 denomination.
 

This N5000 note will take corruption, which is already high, to the heavens. Why do you think bribe takers and givers prefer dollars? It is because a few notes exchanging hands will be converted to millions of naira. If this administration is serious about fighting crime, it should shelve the N5000 note idea.
 

• Faces of Women to be on the N5, 000 note

Money fakers will have a field day with the N5000 note. Nobody goes about faking the lower currencies, they go for the top. I can just imagine somebody buying drugs worth N5000 in my pharmacy with a fake note. God help me!
 

He, Sanusi, opined that some countries, notably Japan, Singapore and Germany with higher denominations of currencies recorded 2.8, 1.1 and -0.7 inflation rates respectively in 2010.

Why do we always have to rush to these countries when it suits us but turn around the next day to say Nigeria is a developing nation and should not be compared to developed nations. Mallam CBN Governor needs to know that we have made decisions in the past using successes obtained in Western countries as yard stick to project how successful ours too will be, only to have a disastrous failure. Nigeria is different. 

 faces

One classical example is Structural Adjustment Programme (SAP). Who needs more of such failures? NONE. Besides is Governor CBN aware that there are calls in India to phase out the higher denominations (Rs 500 and R1000)? May be he chooses not to notice since that won't support his warped policy.
 

The CBN governor was also reported to have said that various segments of the Nigerian state shall be encouraged to create avenues for the usage of coins.
 

Really? The first place I was told to "take that thing (coins) away" was a government office. Besides with all the noise he calls jingles on TV, radio about not spraying naira notes on people, not squeezing, not writing on them etc, as well as not selling new currencies, have these practices stopped? Well, I guess Sanusi is not aware. Talk, as they say, is cheap.
 

The last time that 50k and N1 were changed to coins we saw what happened. The prices of items were adjusted overnight to the nearest naira note. All items that were initially valued between N1 and N4.50k became N5. Candies that used to sell N2 or N3 each became N5; items between N6 and N9.50k became N10 naira, and so on and so forth.

 Within a short time of the introduction of those coins, prices of commodities were adjusted such that nobody even needed to use them. These coins, printed at a cost to the nation, have since disappeared. What a waste! CBN governor, where are the coins? 

May be CBN mopped up these coins from the market and kept in the vaults to rust, (or they have been sold to smiths that converted them to very costly jewelleries), yet they want to repeat this same foolishness which leads to increased hardship on the masses as a result of increased prices consequent upon inflation. Why, why, why Sanusi, why?
 

My one kobo advice is this: CBN should jettison the N5000 note idea. Rather than mint a N5000 note, the N1000 and the N500 notes should be withdrawn from circulation. This will help create need for the cashless economy policy, fight corruption, and also check faking of notes.
 

The coins idea should also be thrown into the thrash can. If Sanusi wants to introduce coins by all means, he should revalue the naira. He should drop at least a zero from the naira, that way we would have a need for the N1 and 50k coins, as items selling for N10 now will sell for N1, and those selling N5 now will sell for 50k. It makes absolutely no sense to coin the N5, 10 and 20 notes.

I do not know much, but I do know bad when I see bad, and Mallam Sanusi Lamido Sanusi, this policy is a BAD one! QED.

 culled from Sahara Reporter