Vanguard (Lagos)

2 September 2012

Nigeria: Introduction of N5,000 Note Is Economic Waste - Bankers

BANKERS in Nigeria, under the aegis of the Association of Senior Staff of Banks, Insurance and Financial Institutions, ASSBIFI, has faulted the planned introduction of N5,000 note by the Central Bank of Nigeria, CBN, next year, describing it as an economic waste to the nation.

ASSBIFI in a statement argued that the estimated N40 billion to be spent on the proposed Naira restructuring could be better channeled to enhance the perennial power problems, health, education, and road rehabilitation and so on.

In the statement by its President and Senior Assistant Secretary-General, Sunday Salako and Friday Inegbedion respectively, ASSBIFI said, "the announcement of Thursday August 23, 2012 by the Central Bank of Nigeria on the proposed restructuring of the Naira that will lead to the introduction of N5,000 note come year 2013 was received with great shock that we are yet to recover from.

ASSBIFI, as an umbrella body for all senior workers in banking, insurance and financial institutions in Nigeria strongly oppose the whole idea of the proposed Naira restructuring at this point in time, particularly the introduction of higher banknote of N5,000 next year by CBN under its currently redesign programme tagged 'PROJECT CURE.'

The question we are asking as practitioners and as Nigerians is what project or object is the programme out to 'cure'? Is it inflation, interest rate, improper banking habit, bank robberies, unemployment, corruption, money laundering, poverty, insecurity, etc?

"We have always advocated that national issues of this magnitude with serious monetary and fiscal implications on the nation's economy, should be subjected to public debate. We seriously disagree with the CBN Governor's claim that the idea is as a result of inflationary pressures, rather, we believe it is more of miscalculation and economic somersault.

"Nigerians are yet to come to terms with the economic gains of Sanusi's reformation agenda since assumption of office as governor of Central Bank of Nigeria. For instance, interest rate is still at double digit level; dusts raised by the recapitalisation cum nationalisation of banks are yet to settle as workers are laid off in droves without adequate provision for their terminal benefits; the cash-less programme is still at the experimental stage.

"Let us take some time to look back. This is the 10th time the national currency, Naira will be restructured since its introduction in 1973 to replace the pounds sterling. Prior to the Pounds, the people of Nigeria were using cowry shells as currency. In all of these, it only signals the devaluation of the nation's currency and slippery slope towards hyper-inflation.

"The introduction of higher value currency notes in the economy often signifies a regime of increased and sustained fiscal deficit financing. Our ancestors developed hunch-backs carrying sacks of shells, so the present generation has bluntly refused the same load of coins. What they do immediately is to price all goods and services out of those coins range. The infrastructure suitable for appropriate use of coins in our society are conspicuously absent."

"Bank workers are constantly and continually maimed and killed as banks are fire bound with dynamites and huge sums of raw cash carted away. High denomination currencies will increase the amount of cash at bank vaults thus making them vulnerable to attacks.

"Despite the introduction of local and international money transfers, people still carry large sums of cash around and this will be aided by the higher denomination currencies. The enormous resources in monetary terms to prosecute the proposed Naira restructuring has been tentatively put at about N40 billion.

"It is our view that this amount should be channeled to enhance the perennial power problems, health, educations, and road rehabilitation and so on. ASSBIFI advises that this project be dropped immediately while government dissipates energy on projects that will ameliorate the sufferings/agonies of Nigerians."

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