10 September 2012

Nigeria: Sanusi and the N5, 000 Note


Sanusi Lamido Sanusi's nomme de guerre may well be Mr. Controversy. The Central Bank Governor of the Federal Republic of Nigeria may not be deliberately courting rancor but somehow he manages to be tailed by storm at every turn.

Just last Thursday at the Hartsfield-Jackson Atlanta International Airport, someone arranged for the CNB governor to board the Nigeria-bound Delta airline plane even before the elderly and the infirm - and the hornet's nest was stirred as fellow passengers openly criticized the penchant of our elite for undue preferment even in matters as ordinary as boarding a plane.

Trust Nigerians. A colloquium of sorts was empanelled right there on the queue. Ringing loud and clear was the sandpaper-ish voice of a senator who fumed, "This is wrong. Our elite have to show good examples. Why should a young man like Sanusi be jumping the queue ahead of the elderly, the disabled and little children? Is this how to demonstrate his importance? Some of us have first class tickets too but we will never seek preferential treatment."

As I passed by Lamido in his first class seat, it occurred to me that he may not even have been aware of all the hoopla that attended his preferential boarding - or maybe he didn't give a damn! Whatever be the case the point was made by the colloquium of 'experts' on the boarding queue that, had the Chancellor of the Exchequer (UK) or the Chairman of the Federal Reserve Bank (USA) been on the flight, they would have waited on the queue until first class passengers were called.

That small incident in Atlanta is nothing compared to the raging controversy back home over Sanusi's planned introduction of a new denomination of the Nigerian currency, the N5, 000 note. I have stopped trying to understand why economists and accountants don't ever seem to agree on anything, but on this matter the overwhelming verdict on all sides of the divide is that the N5, 000 note is a bad idea.

One would have thought that any decision with far-reaching implications for the economy would be comprehensively debated and analysed before implementation. But the nation was just confronted with a fait accompli. We were told that the Economic Management Team made the recommendation and the president assented. That's all. The decision was passed on to their subjects through the mass media. But we are insisting that we are citizens, not subjects.

Members of the National Assembly have been crying foul. Senator Eyinnaya Abaribe complained that the Nigerian Senate did not know or approve of the CBN's plans to spend N40 billion to print and circulate N5000 bank notes. "You cannot take such a momentous decision which affects the economy in very fundamental ways without reaching [out] to the Parliament", he said.

Senator Ali Ndume on his part thinks that Sanusi is appropriating the powers that belong to all of us: "Majority of Nigerians have misgivings about the proposed introduction of N5000 note and if they say they don't want it, nobody should force it down their throats. Sanusi is running the CBN like his personal estate. He is behaving like he can do whatever he wants without consulting with anybody. There were many CBN governors before him and they never behaved like this.... "

Labour unions and manufacturers have also been up in arms. The Nigeria Textile Manufacturers Association described the plan as an automatic invitation to inflation stressing that the nation should not easily forget how previous exercises had thrown the nation's economy off-balance and made a mess of the manufacturing sector. In their view, the lower denominations in coins will disappear in no time as experience has shown. Some members of the Manufacturers' Association of Nigeria (MAN) have even suggested an alternative - redecimalisation of the currency as was done in Ghana. They argue that redecimalisation would enhance the value of the Naira and earn more respect for the national currency.

Citizen Adebayo Fatimo, manager of a small and medium scale enterprise based in Lagos has argued that the proposed policy was an enemy of business growth. She pointed out that the last introduction of higher denomination of the Naira in 2005 had a serious negative impact on her business - a point shared by the national chairman of Master Bakers of Nigeria, Chief Ngozi-Chukwu Abaunulor, who served notice that the inevitable inflation that would attend the introduction of the N5, 000 note would automatically shoot up the price of bread. (Shall the alienated central bank then ask the marginalised people to switch to cake when bread becomes unaffordable?!!)

The Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) said the move was more of monetary miscalculation and economic summersault: "This is the 10th time the national currency, Naira, will be restructured since its introduction in 1973 to replace the Pounds and Shilling. All this 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."

Ex-president Olusegun Obasanjo has added his voice to the debate noting that the way the governor Central Bank was fighting inflation by removing money from circulation was improper and that the plan to introduce the N5, 000 would have adverse effects on production.

The only notable voices supporting the plan belong to members of the Economic Management Team, EMT. By far the most passionate defender of the plan is the Minister of National Planning, Shamsudeen Usman, himself a former Deputy-Governor of the Central Bank. Usman does not agree that the new N5, 000 note will encourage corruption. According to him, "a $100 bill is N16, 000; N5000 note will be $30, so which one is bigger to carry if you are doing corruption? Those doing corruption will probably find that too small; the $100 bill is still bigger than the N5000 note."

I don't believe Usman. Neither do opposition political parties who have alleged that the move is designed to facilitate the ruling PDP's plan to move bribe money around to rig the next federal elections. The new note would increase fivefold the volume of cash that could be carried in the usual Ghana-Must-Go bag. Civil society groups are already mobilizing to protest against the proposed N5, 000 note. Some people have been wondering why the CBN cannot be more creative in its single-mindedness; if you must have N5, 000 why not have a 'golden' coin instead of paper money?

Or maybe nobody is yet reckoning with our redoubtable currency forgers in Oluwole who are readier than the CBN for D-Day.

Copyright © 2012 Daily Trust. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.