In a meeting of the Economic Managament Team chaired by President Goodluck Jonathan, the CBN governor, Sanusi Lamido gave a detailed explanation of the programme.
National Planning Minister Shamsudeen Usman said on Tuesday that the proposed N5,000 note would not be for normal circulation but would be reserved for banks and heavy cash users.
The minister said this in an interview with the State House Correspondents after a meeting of the Economic Management Team (EMT) presided over by President Goodluck Jonathan at the State House.
Shamsudeen said like the 5000 Euro note, the new N5000 note would not be in normal circulation but reserved for the banks and few other heavy cash users to store higher value.
He said that the meeting had endorsed the proposal by the Central Bank of Nigeria (CBN) to introduce the big note and coinage of N5, N10 and N20.
Shamsudeen, who is also a member of the team, said the team endorsed the monetary policy after a presentation by the CBN Governor, Sanusi Lamido Sanusi.
He said the introduction of the N5000 notes would neither lead to inflation nor encourage corruption as argued by those that were opposed to it.
The minister also said that the new coins would run concurrently with the notes to test ground if they would be accepted by the public.
“Clearly, the N5000 note unlike some people misrepresent, is not going to lead to higher inflation. There is absolutely no link, I am an economist, I had been deputy governor operations of the Central Bank.
“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 get it well.
“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 together with the notes.’’
He said the introduction of the note was not at variance with the cashless economy policy.
Shamsudeen debunked the argument that the introduction of the N5000 notes would lead to corruption, noting that the allegation of corruption had always been in dollar denomination.
“A 100 dollar bill is N16,000 while N5000 note will be 30 dollars, so which one is bigger to carry if you are doing corruption?
“So, I do not think is necessarily going to increase the level of corruption. Those doing corruption will probably find that too small than 100 dollar bill, which is still bigger than the N5,000 note.’’
Speaking in the same vein, another member of the team from the private sector, Alhaji Aliko Dangote, said the N5000 note would not cause inflation but protect the economy.
The business mogul said that the cost of printing of the note and the coins would not be different from the amount used in printing other notes.
Mr. Aigboje Aig-Imoukhuede, the Managing Director of Access Bank and a member of the team, noted that legal tender and restructuring of currency were part of the normal functions of the Central Bank.
He said the introduction of the new note is not strange and would not lead to higher inflation
“It is unfortunate that some have misled people into thinking that it will lead into higher inflation.’’
Similarly, Chief Atedo Peterside, the Chairman of IBTC, said the N5000 would reduce the cost of printing bills.
“If I were the CBN Governor, I will prefer to print N10,000 notes. Last year, Nigeria spent N47 billion to print these small, small notes.
“ If we were printing bigger denominations, we will print fewer number and you make a 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.’’
The Governors of Adamawa and Anambra , Murtala Nyako and Peter Obi, also spoke in support of the new monetary policy.
However, the EMT are members from public and private sectors, inaugurated by the President in 2011.
It is set up to institute fiscal policies that will encourage local and international investors, inclusive growth and employment generation.
The team is chaired by the President, co-chaired by the Vice President and coordinated by the Minister of Finance, Dr Ngozi Okonjo Iweala. (NAN)