The National Economic Management Team (NEMT) – a conclave of some senior government officials and prominent businessmen – also blessed the idea, following a briefing by Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi.
Meanwhile, the National Assembly has asked the CBN to pull the brakes on the proposal – for now.
But NEMT argued that it was the primary responsibility of the CBN to effect changes in the nation’s currency with the approval of the President.
The economic team also allayed the fear that the note will heighten inflation, saying that there is no link between inflation and currency denomination.
Besides, the group argued that the introduction of the higher currency will help shore up the naira’s value as most people who store money in hard currency will now embrace the high denomination.
The NEMT, which is headed by the President, comprises the Minister of Finance and coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, Sanusi, Minister of National Planning Dr. Shamsudeen Usman, Director General of the Security and Exchange Commission (SEC), Director General of the Bureau for Public Enterprises (BPE), one representative each of governors of the South and the North as well as key private sector players.
Usman spoke at the end of yesterday’s NEMT meeting presided over by President Jonathan.
He explained that contrary to criticisms that the introduction of the N5, 000 notes will bring about inflation in the economy, the new denomination according to him, will rather assist in big business transaction.
The note, he said, will not be high in circulation but will be used mostly by the banks.
His words: “Clearly, the N5000 note will not lead to higher inflation. There is absolutely no link. I am an economist; I have been deputy governor (Operations) of the Central Bank.
“During 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.
“There is absolutely no link between inflation and the currency denomination.
“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 understand. 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 with the notes. Those were my concerns, initially, because you remember during my time in the CBN, we introduced the one naira and two naira coins.
“Unfortunately, they were not utilized at all. Part of that is really the value of one naira and two naira today; what can you buy? So because they are higher denomination, they may be accepted.
“I think even that aspect didn’t come out well in the communication and so the CBN is going to communicate to Nigerians that the coins will run concurrently with the note. They are like testing the waters; if they get accepted and are being utilized, only then will they take subsequent actions.”
Atedo Peterside, a banker and NEMT member argued that besides the fact that it does not add to increase in cost of printing of currency, money, being a store of value, the higher the denomination, the better it is for the economy as those who made money legally and illegally will want keep their loot in naira rather than hard currency.
He said: “If I were the CBN governor, I will prefer to print N10, 000 notes. Last year, Nigeria spent N47billion to print these small, small notes. If we were printing bigger denominations, we will print fewer number and you make 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.
Access Bank Managing Director Aigboje Aig-Imoukuede described the reactions trailing the N5000 note as unfortunate.
He said: “It is very rare for you to have a central bank that does not look at the issue of currency management and issue new notes from time to time based on the reality of the economy. In the case of Nigeria, our economy is such that a N5000 note which is in effect a $30note is not strange.
“The greatest argument I have heard about 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.
“Every central bank by the nature of currency management will issue new notes all the time. So, printing of notes is an ongoing operation that every central bank engages in.
Frontline businessman Alhaji Aliko Dangote said: “The introduction of the N5000 note has nothing to do with inflation. I think it is even to protect the economy. The cost of printing is not anything different from the amount they are using in printing any other note. It is the same cost.
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