N5000 note coming next year — CBN : N20, N10, N5 to be coined

[DT]

The Central Bank of Nigeria will introduce a 5,000 naira note into circulation early next year, as part of a comprehensive currency restructuring exercise in which lower naira denominations will be coined.

Front face of the new highest denomination will be adorned with the pictures of the late Margaret Ekpo, Funmilayo Kuti and Hajiya Gambo Sawaba, while the back side would have the National Assembly structure. Also, the existing N50, N100, N200, N500 and N1000 notes would be redesigned with added new security features and launched at the same time, Central bank governor Sanusi Lamido Sanusi announced in Abuja yesterday.

He said President Goodluck Jonathan has approved the new currency series and also approved for the N20, N10 and N5 notes to be coined and used as legal tender along with the existing coins of 50k, N1 and N2.

The introduction of the new currency series will be a gradual process, Sanusi added, "as the banknotes will circulate simultaneously with the old series until they are fully withdrawn from circulation...as long as the old banknotes are in circulation, they will remain legal tender."

This will be the first major currency restructuring exercise in seven years, with the last one being done by then-CBN governor Charles Soludo in 2005, leading to the introduction of the N20 polymer banknote.

This was followed by the conversion of N5, N10 and N50 paper banknotes into polymer notes in 2009.

Soludo attempted an unprecedented redenomination in 2007 which would have seen the knocking off of some zeros from the currency values. But the then-President Umaru Yar'Adua pulled the brakes.

International best practices stipulates for monetary authorities to review their nations' currencies at intervals of between five and eight years. The aim is to address, among other factors, inevitable weaknesses and challenges identified in the circulating banknotes and coins.

Sanusi did not say yesterday which company would be involved in minting the currency notes and coins, and also did not say what the cost implications would be.

But he said the CBN's Currency Operations Department, Nigerian Security Printing and Minting Company Plc, along with international consultants, collaborated in the redesign project.

No inflation concerns

On if the introduction of N5000 note would spur inflation, Sanusi said inflation in Nigeria is a "monetary phenomenon." Inflation is currently 12.8 percent and the governor said he does not think it would go beyond 14 percent before the end of the year.

He said countries like Singapore, Germany and Japan that have the highest denominations have relatively higher dollar equivalent and lower rates of inflation.

"(We) believe that the introduction of a higher bill would complement the bank's cash less policy as it would substantially reduce the volume of currency in circulation particularly in the long term," he said.

Coins have generally gone out of circulation around the country, obviously because inflation has rendered them of little value.

Sanusi said efforts would be made to encourage the use of coins by liaising with government agencies, banks, road transport workers, market operators, small businesses, supermarkets, vendors and others.

"We would ensure that coin collection is convenient and the infrastructure readily assessable," Sanusi said.

'N5000 note may aid corruption'

Financial expert, Bismarck Rewane, said the introduction of N5000 note may aid corruption and encourage more spending but is not likely to spur inflation.

"I don't think there is any correlation between reduction in denomination and inflationary trend. It is more or less coincidental rather than aiding each other, because there is no proof to show that the higher the denomination of currency the higher the rate of inflation in a country," Rewane, who is the chief executive officer of Financial Derivatives Limited, told Daily Trust in Lagos yesterday.

"But it might encourage corruption and also encourage more spending. If for instance I go to a supermarket and I have N5,000 note with me, the moment I bring it out there is tendency to spend more.

"Also, if I want to bribe you and I want to give you N1 million, I will only give you 10 bundles. But these are not the issues. The truth is that if we are going cashless, we should be reducing the denomination; the lower the denomination the better."

The women on the new note

The three late women whose faces would adorn the new N5000 note are renowned women activists.

Hajiya Gambo Sawaba (1933-2001), from Zaria, Kaduna State, was one of the early supporters of the pro-masses Northern Elements Progressive Union in the First Republic. Her political activities during the period earned her persecutions from both the colonial authorities and the native administrations which resulted in her being incarcerated, according to her biography.

Margaret Ekpo (1914-2006), from Aba, Abia State, was a women rights activist and social mobiliser who was a pioneering female politician in the First Republic, according to online encyclopedia Wikipedia. She was a leading member of a class of traditional women activists, many of whom rallied women beyond notions of ethnic solidarity.

Funmilayo Ransome-Kuti (1900-1978) from Abeokuta, Ogun State, was a teacher, political campaigner, women's rights activist and traditional aristocrat. She was one of the most prominent leaders of her generation, according to Wikipedia. Early on, she was a very powerful force advocating for the Nigerian woman's right to vote. She was the mother of the late musician Fela Anikulapo Kuti, medical doctor and activist Beko Ransome-Kuti, and former health minister Professor Olikoye Ransome-Kuti.



Daily Trust

[Seun Omokunle]

  Introducing the note will not make any change

as we all know that is not the next step.