The Minister of National Planning, Dr. Shamsudeen Usman, has said that the Central Bank of Nigeria only requires the approval of President Goodluck Ebele Jonathan to introduce the proposed N5,000 note.
Usman spoke at the State House in Abuja after a meeting with Jonathan, just as eminent industrialist, Alhaji Aliko Dangote, said the introduction of the controversial N5,000 note will not lead to inflation.
The meeting with Jonathan, which was called to discuss the effect of the N5,000 note and coins on the economy, was also attended by the Vice President, Architect Namadi Sambo; the Minister of Finance, Dr. Ngozi Okonjo-Iweala; and Aig Imoukhuede.
Dangote said of fears of inflation if the N5,000 is introduced into the economy: “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.
“The only difference is the design and the figure printed on them.
“Sometimes, minting the coins can even help.
“If I have a product, which I am selling for N5 and I want to raise the price to N6, I won’t be able to do that.
“It is either I swallow the bullet and take it to N10 or I don’t increase at all.
“A lot of companies have not been able to increase their prices even though they are loosing money.
“People are saying that Central Bank is going to spend N40 billion on the new note.
“Of course last year when you look at the budget, they spent N47 billion to print currencies.
“So it is not different at all.”
Usman, apparently speaking against the backdrop of the position of the National Assembly that the CBN ought to have informed it of the planned introduction of the N5,000 note, said the CBN requires no other authorisation than that of the President.
Usman said the introduction of the new note and coins will not lead to inflation.
He said: “Clearly, the N5,000 note, unlike how some people misrepresent it, is not going to lead to higher inflation.
“There is absolutely no link.
“I am an economist.
“I have been deputy governor operations of the Central Bank.
“The last review of the introduction of N1,000 note and the various coins, I was deeply involved.
“It was my responsibility in 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.
“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 the 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 N1 and N2 coins.
“Unfortunately, they were not utilised at all.
“Part of that is really the value of N1 and N2 today.
“What can you buy?
“So because they are higher denomination they may be able to 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 utilised only then will they take subsequent actions.”
On the fears that the N5,000 note will lead to corruption, Usman said: “That is an area that I obviously know nothing about.
“I think people alleged that part of that corruption is being done in dollars.
“A $100 bill is N16,000.
“N5000 note will be $30.
“So which one is bigger to carry if you are doing corruption?
So I think it is not necessarily going to increase the level of corruption.
“Those doing corruption will probably find that too small.
“The $100 bill is still bigger than the N5,000 note.”