25 August 2012

Nigeria: ANPP, CPC Say N5000 Note Will Aid Corruption

Photo: Leadership

The planned introduction of N5, 000 notes in Nigeria in early 2013 will not only cause inflation but will also aid corruption, the opposition All Nigeria Peoples Party (ANPP) and the Congress for Progressive Change(CPC) have said.

The two parties who spoke separately in Abuja were also unanimous in their opposition to other currency restructuring that will lead to the conversion of N20, N10 and N5 notes into coins.

Spokesman of the ANPP Emma Eneukwu said that the CBN action is another clear path to inflation and resultant suffering on the hapless Nigerians, adding, "the decision by the federal government to convert some lower denomination notes to coins smells of a premeditated agenda to further mop up cash from the nation space and whip the Nigerian people in the process, just as it had done through the increase in the pump price of fuel and hike in electricity tariff. In fact, one does not need an economics professor to know that this move will eventually cripple the value of the naira; countries like Japan, Germany and Singapore do not have strong currencies because they printed higher denominations.

"Moreover, going cashless has nothing to do with printing N5, 000, but everything to do with introducing valid strategies for redirecting the nation's commercial transactions into the virtual space. Right now, what the CBN and the federal government should be engaged in is establishing a clear and comprehensive electronic fraud management framework, as well as delineating of responsibility among key stakeholders, and advocating enabling laws that will inspire confidence in the country's e-payment network, both locally and internationally; not to saddle the helpless masses with more burdens."

Also speaking, CPC spokesman Rotimi Fashakin said the CBN governor's argument for a higher denomination on the need to complement the cashless economy policy does not hold water.

"We disagree with this position because, given Nigeria's struggles with bribery and corruption, this new introduction of higher denomination is antithetical to the much-touted cashless economy. In fact, the era of 'Ghana-must-go bags' dwindled with the introduction of the N500 and N1000 notes in the past. It became easier to carry millions of Naira in moderately-sized brief cases and, inexorably, increasing the incidences of high-profile bribery scandals in the polity. Recently, we witnessed the allegations and counter-allegations of solicitation for and receipt of bribe money levied against certain highly influential politicians in the Country. We insist that the introduction of N5000 currency note shall further exacerbate the corruptive tendencies in the Nigerian polity.

"Whilst we agree with the CBN that printing of notes is more expensive than minting coins, it is difficult to believe that the solution lies in converting the N5, N10 and N20 notes to coins. First, the cultural values of the Nigerian people do not favour use of coins. The question is: how did we fare with the previous conversion of 50k, N1and N2 Naira notes to coins? In fact, those currencies tacitly went out of circulation as a result of disuse. Second, with an economy very susceptible to fragile macroeconomic distortions, the tendency is often for the price of goods and services to be at par with the currency notes in circulation. What will invariably happen is the spiralling inflation that may cause further macroeconomic distortions and unwittingly, bringing about political upheavals. Third, the existence of the foregoing scenarios may exacerbate the already polarized Nigerian polity of have's and have-not's, with the systematic break-down of the middle class."

Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi has said that the planned introduction of 5, 000 notes into circulation early 2013 will not cause inflation.

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