1 September 2012

Nigeria: Much Ado About N5,000 Note

Photo: Vanguard
Nigeria N5000 note.

Again, the Central Bank of Nigeria Governor Mallam Sanusi Lamido has come under serious attack following his proposed plans to introduce N5,000 note and coining of lower denomination. However a panoramic view of Sanusi's previous policies since he mount the saddle of the CBN, shows, that the Moslem scholar has never had smooth ride.

For many Nigerians, the banking reform programme he undertook, laudable though it seems, threw many Nigerians out of job and has further put the apparatus of the economy in disarray.

Much as it has helped in no small measure to checkmate excesses of the privileged few who in their parochial wisdom opted to help themselves with depositors' funds, the dust generated by that reform is yet to settle. Today, most of the claimed bankers by the government are yet to find a foothold.

The shareholders and few workers left are still in disarray. To say the least, banks seldom grant loan to prospective investors.

But while the quest to finally reconcile the abnormalities created by that reform is still in the works, the CBN yet again reeled out another provoking policy otherwise known as cashless.

The litany of criticisms pervaded by that already implemented proposal found expression in the fear exhibited by Nigerians.

Discordant tunes continued to trail the policy right from its draw board to its actualisation. Despite the hew and cry against it, the CBN Governor made bold to uphold the policy amid the plethora of criticism it attracted. The gullibility of Nigerians speaks volume on the fast rate of its acceptance and subsequent implementation.

However, despite the unwholesome acceptance of this policy, the CBN in its wisdom has deemed it expedient to perfect plans that will lead to the introduction of N5,000 bill as well as coin the lower currencies of N5, N10 and N20 notes respectively.

This arrangement provoked Nigerians who feel that the CBN Governor is in hurry to write his name in gold. For them, whatever reasons the CBN Governor has proffered to justify his plan does not seem to hold water because according to them, the consequences far outweigh the benefits if any at all.

Apart from causing hyper inflation, the introduction of high currency denomination into the economy will aid corruption particularly in our nascent democracy which is revolves around "cash and carry."

Conversely, the coining of the lower currencies will no doubt phase them out of circulation, as goods and services hitherto sold and rendered at such rates will tripple.

Also, the danger of carrying coins and its acceptability is another kettle of fish. For the blacksmith, the coin will definitely create a fresh challenge for them in the profession, while women will expect new designs in their jewelries and necklace.

Accordingly, experts have pegged N40 billion as conservative estimate for the cost of the production of the new currencies. The ploughing of this huge amount of money into such unwarranted project amid the lack of infrastructural underdevelopment needs much to be desired.

Though the Senate in its wisdom have deem it necessary to put the plan on hold. The reasons averred by the lawmakers appeared justified but how long will the Senate decision remain can be better appreciated in the CBN Act, which the CBN has applied in the implementation of previous controversial policies as bank reform, and cashless policies. From all indications, it appears the CBN may go ahead with this policy if not properly monitored.

The argument of whether the Senate has declared may not hold-sway if the President has given its nod on it. However, whichever way the pendulum swings, it is only time that will tell.

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