Saturday, 25 August 2012

N5,000 Note: Nigerians say ‘No’ + Experts Flay CBN Over The Issue

Experts across the country have condemned plans by the Central Bank of Nigeria (CBN) to introduce the N5,000 denomination and turn the N5, N10 and N20 notes into coins.
The experts who spoke with LEADERSHIP WEEKEND insisted that what the country needed was not the redesigning of its currency or introduction of higher denominations but managing the economy to diversify its revenue base away from dependence on oil, creating jobs, reducing inflation rate, helping the manufacturing sector to grow and fighting corruption.

Foremost financial analyst and economist, Mr Henry Boyo, who described the policy as intended to hide the failures of the monetary policy of the CBN, said the N5,000 note was simply a precursor to more higher denominations, which would like follow soon after its debut next year.
He said the country would not avoid redenomination in the end, “as more higher denomination notes would soon follow the N5,000 in quick successions.”
Boyo recalled that in 2005 when the N1,000note was introduced, he had warned that it was a precursor to higher denominations, stressing that this had come to pass sooner than he expected.
He predicted that “soon the N10,000 note would follow, then N50,000 and N100,000 and on and on like that.”
Managing Director and Chief Executive of Maxifund Securities Limited, MaziOkechukwuUnegbu,said the conversion to coins would “bastardise and debase the value of the N20.”
Unegbu added: “It means that they are not even thinking, they are not looking at what they have. They are not even looking into the Central Bank vault to see the bulk of N1 coin littering there.They are not looking at the commercial banks that keep notes nobody accepts, including beggars. So why do they want to go that way again?”
He queried: What structure was applied in jumping from the N1,000 to N5,000 without first introducing a smaller note like N2,000? What is the cost of maintaining the entire currency framework? What is the cost of introducing the higher denomination? What is the cost of promoting acceptance of the new note across the country? What is the cost of destroying the old notes that would be discarded?”

Culled from: Leadership Weekend

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