Sanusi: Inflation Will Not Affect the Introduction of N5000 Note Into Nigeria Economy

Following yesterday's announcement that  5000 Naira notes will be introduced into the Nigeria market, Central Bank of Nigeria (CBN) Governor,  Lamido Sanusi, has stated that the introduction of the new note will not cause inflation to the country's economy.

According to him, introduction of  new currency in countries like Singapore, Japan and Germany which have higher bills of 10, 000 have not being weighed down by inflation.

“These denominations have relatively high dollar equivalent. The levels of inflation are, however, low at 2.8 percent, 1.1 per cent and -0.7 percent, respectively as of 2010. Furthermore, we believe that the introduction of a higher bill will complement the bank’s cash-less policy, as it will substantially reduce the volume of currency in circulation, particularly in the long term,” he said.

The new currency, which will be introduced into the Nigeria market next year (2013) will feature the faces of three Nigeria female nationalists - Margaret Ekpo, Funmilayo Kuti and Gambo Sawaba.

Speaking on the physical attribute of the proposed legal tender, CBN Governor, Lamido Sanusi, said “we have chosen three Nigerian women involved in the pre-independence struggles. And at the back, we have the National Assembly, denoting democracy.”
The last comprehensive review of the country’s currency was carried out in 2005, which resulted in the introduction of the N20 polymer banknote, followed by the withdrawal of the N50, N10 and N5 bank notes in 2007, which were also converted into polymer banknotes in 2009.

However, as part of the new currency appraisal, the N1000, N500, N200, N100, N50 notes will be redesigned and upgraded for security purpose while the N20, N10, and N5 notes will be converted to coins.  50K, N1, N2 are also to be included in the coins category.

Sanusi adjudged that the usage of coins will curb inflationary pressures, enhance the quality of banknotes and promote the cash-less policy.

To encourage the use of coins in the Nigerian market, Sanusi said that the apex bank would liaise with the relevant ministries, departments and agencies of government, Deposit Money Banks, road transport workers, market operators, small businesses and supermarkets.

According to him the change of the naira note which he called “Project Cure,” was aimed at upgrading the design of the entire range of currency denominations in order to enhance their quality and integrity, incorporate more effective features for the visually challenged, and introduce new security features on the redesigned banknotes.
He also stated that the currency change plan is done to achieve an optimal currency structure that will ensure cost effectiveness and balanced mix and utilisation of all the currency denominations; introduce new series of coins that will be generally acceptable for the purpose of transactions; and reducing the cost of production, distribution and disposal of banknotes by introducing higher bills that will reduce the volume and cost of banknotes in circulation.

Sanusi stated that, “On November 28, 2011, the CBN board considered and approved the new currency series. It subsequently sought and on December 19, 2011, obtained the approval of President Goodluck Jonathan.”
He however said that “There would be no urgent need for exchange of the old for the new bank notes by the general public for as long as the old banknotes are in circulation; they will remain legal tender.”