The Federal Government has said there will be no going back on the introduction of the very controversial N5000 banknote.
Minister of Planning, Shamsudeen Usman, told journalists on Tuesday that President Goodluck Jonathan, after a meeting with the Economic Management Team, has already approved the proposal to print the N5000 note.
“The discussion today (Tuesday) was basically to endorse(the introduction of N5000 note). Mr. President had already approved and that is the only requirement by law. The CBN (Central Bank of Nigeria) is to propose and Mr. President is to approve,” he said.
The EMT, including Alhaji Aliko Dangote, Mr. Femi Otedola, Mr. Atedo Peterside, Mr Aigboje Aig-Imoukhuede and other top government officials, are behind the introduction of the huge note, despite widespread criticism.
Economists have argued that the new note will lead to inflation, something that the CBN has dismissed, claiming there will be no inflation.
Distrustful of the government, hundreds of protesters led by former House of Reps member, Dino Melaye, demonstrated in front of the CBN office in Abuja against the introduction of the note, saying it would send the wrong signal about the worth of the naira.
Lagos-based lawyer Femi Falana also condemned it and called on AGF Mohammed Adoke to keep the CBN from printing the new note.
N5000 banknote is not for the masses
However supporters of the big note say there is no relation between the new note and inflation. Speaking in Lagos, CBN spokesman, Mr. Ugochukwu Okoroafor, said the note will not be printed in excess.
In a Vanguard report, Usman is quoted as saying “like the 500 euro note, the new N5000 note would not be in normal circulation but would be reserved for the banks and few other heavy cash users to store higher value”.
“I have been in parts of the United States where you draw the $100 bill and give it to somebody and they start looking at it as if it is something strange, they probably have not seen it.
“So the higher denominations are there to create higher value, they will not be in the widest of circulation. And I think what is important is that there is no link between it and inflation,” Usman added.
He said the note will not in anyway aid corruption. However, while he supported new N5000 note, he faulted CBN governor Lamido Sanusi’s handling of the news.
“I think even that aspect didn’t come out well. 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 utilised, only then will they take subsequent actions,” he explained.
‘I would prefer to print N10000 notes’
Some supporters of the new note are decidedly undaunted by its introduction, with Peterside calling for even higher denominations.
He said, “If I were the CBN Governor, I would prefer to print N10000 notes.
“Last year, Nigeria spent N47bn to print these small notes. If we were printing bigger denominations, we will print a fewer number and 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.
“So they need a higher denomination notes. Right now, they are using the $100 notes all over Nigeria because they are the best store of values for them.
“If you give them a better store of value in Nigeria, they will move away from these dollars and reduce the demand for the $100 notes and move into our own currency as opposed to the use of $100 notes to hide their loots and so on.”
Peterside explained that the new note, as well as eliminating the need for N10 and N20 notes will save resources used to print “worthless notes”.
No relationship between inflation and N5000 note
Dangote is also in support of the new note, dismissing fears of inflation. He says the N5000, the equivalent of $30 is not strange.
“The greatest argument I have heard about it is that the introduction will cause 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 people have misled Nigerians 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.
“As you are introducing N5,000 notes, you print less of N1,000 and N500 notes. It is not going to add to the cost of printing, it is going to basically fall into your normal annual budget for printing.”