N5,000 Note: Nigerians say ‘No’

Plans by the Central Bank of Nigeria to restructure the country’s currencies, especially the introduction of N5,000 note, will facilitate corruption, promote money laundering and increase financing of terrorist activities, say stakeholders in the financial sector.
The stakeholders, who spoke to Saturday Vanguard, yesterday, said the introduction of the N5,000 note would adversely affect the economy and have a ripple effect on the populace.

“I hope the new N5000 note is NOT another policy somersault? With steps already taken by CBN itself to address money laundering in the country such as Know-Your-Customers, re-validation of banks’ customers and the on going cashless Lagos, one wonders if the proposed higher denomination of N5000 will not undermine that effort, coupled with our inability to discover and disrupt terrorism financing,” said Mr. Tunde Salman, a financial analyst.

He advised the CBN to delay the introduction of the higher note, until the year 2020, stating that, “What we needed now is how to replace the polymer notes (N5, N10, N20, and N50) that seemed not to have secondhand value in terms of durability

“If, however, they are desirous of introducing the N5000 note, I think the CBN can wait till year 2020 when we might have achieved that tall dream called 20/2020 for the introduction and elaborate launching.”

Also speaking, Mr. Eghes Eyieyien, Chief Executive Officer, Pharez Consulting, said, “It is clearly a wrong move; it signals the interment of all the currencies which are to be turned into coins and will no doubt induce inflation. The cash culture of Nigerians and our history with such actions point to these facts. The sad thing is that we never seem to learn from history.
”Sanusi is too fixated on being applauded as a ‘Reformer’ such that he would introduce any kind of change for its mere sake. That President Goodluck Jonathan cannot see the destructive impact of Sanusi’s many ill-conceived ideas is perplexing.”

In his own view, Mr. Bismarck Rewane, an economist and Chief Executive Officer, Financial Derivatives Company, FDC, Plc, said, there is no need for a redenomination of the currency, especially with the cashless policy.

He said, “With the cash-less policy, we do not need the high denomination notes as everybody is going cash-less.”

Also speaking, Dr. Samuel Nzekwe, immediate past president, Association of National Accountants of Nigeria, ANAN, said, “The introduction of high denomination would make it possible to carry large sums around. One of the reasons the local currency was depreciating was as a result of the inactive manufacturing sector and the import-oriented nature of the country.

“Most of the commodities consumed in the country were imported from abroad and this is making the currency to lose value.”

Mr Olumide Adegoke, General Manager, Standard Alliance Insurance, said, “The higher note could encourage corruption as it would be easy to carry huge sums within the system.CBN should also be looking at ways of checking inflation.”

Dr Solomon Nyagba, President of the Abuja Chamber of Commerce, Industry, Mines and Agriculture (ABUCCIMA), said, “It is clearly a wrong signal for the economy. Denomination is not the issue, the most important step is to encourage local production which will strengthen the currency and rev up the economy.

“Any economy that is dependent on importation will never be stable no matter the size of the denomination.”

Speaking in the same vein, Mr. Opeyemi Agbaje, Chief Executive Officer, Resource and Trust Company, RTC, Limited, said, “It will also cost money; a cost I find indefensible, given the quite recent notes (polymer etc) introduced by immediate past CBN governor, Soludo. It does seem that unclear motives and logic permeates this proposal.

“I, however, do not accept that there is scientific or econometric evidence to support the position that higher denomination currency automatically, without more, will necessarily result in inflation.

“The only positive argument may be the lower cash processing cost that may be incurred by banks with higher currency denominations. I do not consider this benefit sufficient justification for this seeming diversionary policy.”

Source: VANGUARD