The Federal Government's Economic Management Team yesterday announced an endorsement of the Central Bank's plans to introduce a N5000 note, saying it will not cause inflation.
This came as protesters stormed the premises of the Central Bank of Nigeria in Abuja yesterday, defying rains to show their opposition to the new naira note on fears that it could send prices of goods and services rocketing.
National Planning Minister Shamsudeen Usman told journalists at the State House after the economic team's meeting that the CBN needed only the President's approval to restructure the currency and President Jonathan has already approved the new policy.
"So, obviously the discussion today was basically to endorse what 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," Usman said.
The Senate had rejected the new naira note, saying CBN governor Sanusi Lamido Sanusi needed to have obtained prior legislative approval before embarking on the process.
Usman's statement on finality of the project was apparently in response to the Senate's position.
He added that contrary to widespread fears, the coming of the N5000 note will not spur inflation.
"Clearly, the N5000 note, unlike some people misrepresent, is not going to lead to higher inflation. There is absolutely no link," he said.
The CBN currency restructuring plan also includes coining of the existing N5, N10 and N20 notes.
Usman said the coins will circulate side by side with the notes, and that "if people accept them (the coins) and are using them, then gradually they will withdraw the other notes but they will run concurrently with the notes."
He also said the N5000 note will not affect the cashless policy of the CBN as the new note will not be in high circulation.
Other members of the economic team also spoke in favour of the new naira note.
Business mogul Aliko Dangote said, "Sometimes, minting the coins can even help. If I have a product which I am selling for N5 and I want to raise the price to N6, I won't be able to do that. It is either I swallow the bullet and take it to N10 or I don't increase at all."
Access Bank managing director Aigboje Aig-Imuokhuede said, "(The) N5000 note which is in effect a $30 note is not strange. The greatest argument I have heard about it is causing of inflation. The other argument is that it will cost money to introduce the new note. There is no relationship between the issuance of higher legal tender and inflation. It is unfortunate that some have misled people into thinking that it will lead into higher inflation."
Chairman of StanbicIBTC bank Atedo Peterside said, "Right now, the country is losing in two ways. One, we are importing massive US dollars to finance the activities of all these rouges, because the US dollars offered the higher store of values for them. And two, we squander our resources printing large volumes of worthless notes."
Protesters storm CBN office
Few hours before the economic team announced its support for the new naira note, demonstrators led by former House of Representatives member Dino Malaye yesterday stormed the Central Bank of Nigeria premises in Abuja to oppose introduction of the N5000 note and coining of lower denominations.
Singing "We no go gree", the protesters said they want the policy reversed.
Malaye, who read out the protesters' grievances to the deputy governor of CBN in charge of operations Tunde Lemo, said they are giving the management of the bank two weeks to reverse the decision or risk "occupation" of CBN.
The protesters, under the Anti-Corruption Network, who started their protest by 9.45 am in the rains and amidst presence of security agents, said the coinage of lower denominations will eliminate the contribution of Sir Abubakar Tafawa Balewa, Mr. Alvan Ikoku and General Murtala Muhammed to the nation's development.
The protesters carried placards with various inscriptions like, "Sanusi is wicked", "Sanusi must go", "Nigerians say no to Sanusi's crooked notes", "Sanusi's notes will aid Boko Haram, corruption" and "Nigerians reject the wicked N5000 notes."
Melaye said, "The implication of the N5000 notes on the economy is serious. The policy is unnecessary and will serve no useful purpose. We have more serious socioeconomic challenges than restructuring currency at the moment."
While addressing the protesters, Lemo said that CBN will never do anything to negatively affect the life of Nigerians.
"We have a lot of respect for the masses of this country because without the masses there would not be central bank. The central bank is doing a lot to help the masses. The most important function of the bank is to help fight inflation. Inflation hurts masses more than anyone else. The leadership of the central bank under the leadership of Sanusi Lamido Sanusi is interested in ensuring that the masses of this country do not suffer."
Daily Trust
it was a timely decision