Central Bank of Nigeria’s Governor Lamido Sanusi on Tuesday called former President Olusegun Obasanjo “a very bad economist” after the latter vocalized his disapproval of the introduction the new N5000 note.
At the sixth annual conference of the Chartered Institute of Bankers of Nigeria in Abuja, Sanusi said Obasanjo was wrong when he suggested the new top note will cause inflation and pointed out that under the former president, high denominations, including the N1000 note came into effect.
“This is an interesting country because my uncle or my father, who is our former Head of State, Gen. Obasanjo, you know he is a very successful farmer, but he is a very bad economist. He stands up and says that this higher denomination (N5000 note) will cause inflation and improve hardship,” Sanusi told the conference participants.
Last Thursday, Obasanjo claimed that the new note Sanusi is backing will kill production and affect small businesses. He further argued that fighting inflation by removing money from circulation was improper, according to Punch newspapers.
While Sanusi applauded Obasanjo’s war on inflation, he counters that the ex-president did more harm than good during his tenure.
“Gen. Obasanjo did N20, he did N100, N200, N500 and N1,000. He introduced higher denominations in Nigeria than any other head of state. He did a N100 note in 1999, he did N200 in 2000, he did N500 two years later and in that period inflation was coming down because it was accompanied by prudent fiscal and monetary policy.
“For somebody (Obasanjo) who had done this to stand up and say introducing a higher denomination will cause inflation must be an empirical, most important determinant of inflation in our country given the number of notes he had printed.
“We all know that we cannot have inflation by printing higher bills if you don’t increase money supply and this is simple economics.”
New note equals efficiency
He described as ignorant those opposing the N5000 note. He said the new note will bring more efficiency and the larger notes will only be made available to Nigerians handling huge cash amounts. The N5, N10 and N20 notes that will be replaced with coins would mean the end of frequent printing of the small notes as coins will last longer.
He said, ”The total cost of printing and minting all denominations in Nigeria in 2009 was N47bn and by 2011 we have brought it down to N32bn and by 2014 we will be spending N25bn and we would have saved 50 per cent of the total cost of procurement.
“These notes (N5000) won’t cost us more than N1bn to N2bn.”
As regards to allegations that the N5000 note will increase corruption, he dismissed them as baseless, saying more corrupt transactions, including money laundering, are done in dollar bills.
“People go, change N3m into dollars and put in their wallets . There is corruption but not everybody who uses cash is corrupt and there is a valid point that if a currency has lost its store of value, it makes economic sense to produce a higher denomination.”
‘Mothers of the nation’
Sanusi also addressed the complaints of families of the three women – Funmilayo Ransom Kuti, Margret Ekpo and Sawaba – who have argued against having the face of their famous matriarchs on the controversial bill.
The CBN governor says the women are mothers of the nation who deserve the honor of being on the top bill.
“The way we see it at the CBN is different from how people see it. For us, the more important you are, you should be placed on the notes that have higher level of circulation and the N5 note is the one that is mostly circulated among Nigerians and you have the prime minister there.
“People should know that these women are mothers of the nation and nobody can claim them. The biological families of all these women should now know that we all have claim to them.
“We do not need anybody’s permission to put them on the naira because they are mothers of the nation.”