The Economic Management Team throws its weight behind the CBN
The Economic Management Team (EMT), on Tuesday, backed the Central Bank of Nigeria (CBN) in its planned currency restructuring.
Shamsudeen Usman, the National Planning Minister, told journalists after the meeting that the proposed N5,000 note would not be for normal circulation but would be reserved for banks and heavy cash users.
He said that like the ?5000 note, the new N5000 note would not be in normal circulation but reserved for the banks and few other heavy cash users to store higher value.
Usman also debunked criticisms that the new note would aid corruption or lead to inflation. “There is absolutely no link, I am an economist, I had been Deputy Governor Operations of the Central Bank,” he said. “The last review of the introduction of N1000 note and the various coins, I was deeply involved, it was my responsibility at the Central Bank.
So, obviously the discussion today was basically to endorse. Mr President had already approved, that is the only requirement by law. The CBN is to propose and Mr President is to approve. And since Mr President has approved, really what is important is to just explain. I personally had some concerns about the coins but since some discussion with the CBN Governor, he has actually clarified that even the media didn’t get it well. The coins are being introduced on an introductory basis so that if people accept them and are using them, then gradually they will withdraw the other notes but they will run concurrently together with the notes.??
Usman also said the introduction of the note was not at variance with the cash-less economy policy; and stressed that it would not encourage corruption. “A $100 bill is N16,000 while N5000 note will be $30, so which one is bigger to carry if you are doing corruption? So, I do not think it is necessarily going to increase the level of corruption. Those doing corruption will probably find that too small than 100 dollar bill, which is still bigger than the N5,000 note,” he said.
Aliko Dangote, a representative of the private sector in the EMT, also said the N5000 note would not cause inflation but protect the economy.
Aigboje Aig-Imoukhuede, the Managing Director of Access Bank, said that legal tender and restructuring of currency were part of the normal functions of the Central Bank. “It is unfortunate that some have misled people into thinking that it will lead into higher inflation,” he said.
Atedo Peterside, the Chairman of Stanbic IBTC, said the N5000 would reduce the cost of printing bills. “If I were the CBN Governor, I will prefer to print N10,000 notes,” he said. “Last year, Nigeria spent N47 billion to print these small notes.
If we were printing bigger denominations, we will print fewer number and you make a phenomenal savings. Secondly, money is a store of value, all these thieves, rogues and vagabonds running around in various states and all over the country, when they steal money, they will want to keep it outside the banking system.”
The EMT, with members from public and private sectors, was inaugurated by the president in 2011 to institute fiscal policies that will encourage local and international investors, inclusive growth and employment generation.
