President Goodluck Jonathan on Thursday finally bowed to pressure as he directed the Governor, Central Bank of Nigeria, Mallam Lamido Sanusi, to suspend the planned introduction of N5,000 note.
The Special Adviser to the President on Media, Dr. Reuben Abati, disclosed the development to State House correspondents in Abuja.
Abati told journalists that Jonathan’s latest disposition to the issue was based on the need for more “enlightenment and consultation”.
He said, “The introduction of the new note is being suspended for now to enable the CBN do more enlightenment on the issue.Yes, President Jonathan has directed that the implementation of the new N5,000 note be suspended for now.
“This is to enable the apex bank to do more in terms of enabling Nigerians understand why it proposed it in the first place. So, for now, the full implementation is on hold.”
The CBN, in a statement on Thursday, also confirmed that it had received a presidential directive to stop action on the currency restructuring plan.
The statement by the apex bank’s spokesperson, Ugo Okoroafor, reads, “The CBN hereby informs the general public that the President, on Thursday, September 20, 2012, directed that further action on the approved restructuring exercise be stopped.
“It is important to stress that till date, no contract whatsoever has been awarded by the CBN in connection with the printing and minting of the new currency notes and coins. Consequently, no currency note or coin has been printed or minted under the proposed exercise.”
The planned introduction of the note had attracted a huge outcry in the public domain. Those against the move had hinged their position on the fact that it could worsen inflation in the country.
They also said it was contrary to the apex bank’s cash-less policy.
At resumption on Tuesday, both arms of the National Assembly passed resolutions asking the CBN not to go ahead with the plan. But the Minister of Information, Mr. Labaran Maku, said that the resolutions are advisory.
Jonathan was said to have expressed his readiness to halt the process when he met with the President of the Senate, Mr. David Mark, and Speaker, House of Representatives, Mr. Aminu Tambuwwal, on Tuesday.
Watchers say that the suspension might be government’s way of cancelling the project without much fuss.
The controversial restructuring of the naira was to be headlined by the introduction of the N5,000 note and the conversion of lower denominations into coins.
Mixed reactions had followed the announcement. Some renowned economists faulted the move, saying the action was uncalled for.
Reacting to the latest development, an economist, Mr. Olujimi Boyo, said the President should have cancelled the project instead of suspending it.
He said, “This is an indication that it may still be revived. If the President has really considered people’s opinion on this action by the CBN, then it should be stopped and not suspended. Telling them to do more work on the project is not what the people are calling for.
“The CBN needs to do more research on what is really affecting the value of the naira, instead of introducing a higher currency or even redenomination. Both moves are not what we need to stabilise our currency. They should find out what can be done to address inflation because this is the main reason why they keep talking about redenomination or introduction of higher currency.
“If the CBN is claiming that the introduction of higher currency will complement the cash-less policy, then they are wrong because redenomination would have been better,” Boyo added.
Also speaking, the Managing Director, Lambeth Trust Investment Limited, Mr. David Adonri, said the suspension of the project was reasonable.
He said, “It is logical that they did not annul the project because the public debate on the issue has been more of politics. The introduction of the policy will be economically beneficial.
“Unfortunately, most of the commentators are not enlightened on the benefits of the policy, especially members of the National Assembly.”
According to some analysts, the introduction of the N5000 bill will defeat the cash-less policy initiative of the bank and increase the amount of currency in circulation.
The Chief Executive Officer, B. Adedipe Associates Limited, who is also a consultant economist, Dr. Biodun Adedipe, said the introduction of a bigger currency note would encourage people to carry more cash around.
He said, “One can easily argue that talking about a bigger note in terms of denomination is more like an endorsement of people carrying even more cash than what we have now. This means there will be more currency in circulation.
“So, if that is what the CBN has been trying to discourage before now, then it will be counter-productive to have a bigger denomination that will encourage people to carry more cash.”
The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, had also said that the plan would defeat the cash-less policy initiative.
A former President, Chief Olusegun Obasanjo, had at a roundtable advocacy forum organised by the Institute of Directors, Nigeria, in Lagos, submitted that the N5000 note would kill production and affect small businesses negatively.
He had added that the way Sanusi was fighting inflation by removing money from circulation was improper
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