N5,000 Note Will Further Devalue The Naira


By Lajuwon Lasisi

There was a time when tortoise resolved to gather all wisdom of the world into a gourd which he later sealed  up and tried to put it on top of a palm tree so as to be out of the reach of any being.

His major problem is how to carry the gourd to the top of palm tree. This it tried so many times without  success. Later, his friend, Mr. Dog, saw him struggling and sweating profusely in order to carry the gourd to  the top. His friend then advised him to tie the rope on the neck so that the gourd would be at his back. The  tortoise acceded to this advice, and he was able to climb the palm tree with ease plus the gourd at its back.

But at a stage, the tortoise stopped climbing the palm tree to reflect on the whole scenario and discover  that he had not been able to gather one tenth of the wisdom of the world in the gourd because ordinary wisdom  to apply and climb the palm tree did not occur to him. The next thing he did was to throw down the gourd from  that moment. And the gourd broke into pieces.

Why can’t the Governor of Central Bank of Nigeria, CBN, Sanusi Lamido Sanusi and his co-travellers of arm- chair economic theoreticians learn from the wise tortoise which thought that it had access to all wisdom of  the earth so as to tower over and above other beings. But at the end it discovered that all the wisdom it  gathered was just like a drop of water in the ocean.

What we are saying is that wisdom is not the absolute prerequisite of any individual. And since the majority  of people have condemned the restructuring of the naira by Sanusi, he should develop a large and broad heart  to accept the superior arguments of these economic professors, doctors, lecturers and sound financial  analysts who are endowed with better qualification and wisdom to know better than Lamido and the government  on this present issue. The major reason adduced by Sanusi that the restructuring of the naira to include  N5,000 is targeted for certain category of people in the economy is a puerile conclusion. That means in the  Nigerian economy, Sanusi has polarised our medium of exchange between the common man and the most corrupt  rich man in Nigeria. That is unfortunate.

Therefore, the decision by CBN to introduce N5,000 into our monetary system, instead of finding a way to  revaluate the naira to its former level of N1 to $1 is misplaced. The moment he reorders the naira  nomenclature to include N5,000 in our expenditure pattern, and turn the already depreciated N5, N10, N20, N50  currency notes into coins, shows the unseriousness of Sanusi’s cashless monetary policy.

The CBN boss has lost his financial cashless policy bearing to the recognition of the three departed women  activists who are now bemoaning in their graves for the likes of Lamido Sanusi, who turned the Nigerian  nation into an economic doldrums.

Perhaps Lamido Sanusi is bereft of how micro-economic policies of the nation should be handled. Since 1986  (26 years ago) that CBN has been devaluing the naira currency to the detriment of micro-economic performance,  and up till this moment, CBN has not been able to revert the naira value to its former position of N1 to $1.  When they started destroying the naira currency, we warned CBN that it should not be so. It is only the  advanced economies of the world, like USA, UK, France, Germany, Japan, Italy, Canada, China, Australia, etc.  that can successfully revalue or devalue their currencies, because certain economic indices must have  indicated the necessity to do so.

The Breton Commission of World Bank which recommended the devaluation of currencies of some developing  countries as an experiment to improve their monetary systems which were regarded as strong, failed to mention  or give the economic parameter to use, or mode of devaluing their currencies. The end result of this unguided  devaluation became disastrous, leading to:

1. Hyper-inflation in the affected countries;

2. Impoverishment of the majority of the people of the whole nations;

3. Lack of viable employment for our graduate youths; many have graduated to professional and  sophisticated armed robbers, causing havoc and insecurity across the country;

4. Kidnapping has become big business in some parts of Nigeria, where a price tag is placed on those  kidnapped. This present phenomenon makes people, chiefs and kings, have to cultivate the habit of (treading)  moving about cautiously in order not to fall prey;

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5. Virtually all our industries are producing below their capacity, other industries have shifted base  to Ghana where there is stable electricity supply to run their industries, and over 800 other industries have  closed shop because of lack of electricity to run their machines.

These are parts of the multiplier effects of the consistent and unending devaluation of naira currency since  1986 when the then military junta of Babangida foolishly and sheepishly acceded to the Breton commission’s  advice to devalue our currency.

However, instead of the CBN boss to work assiduously to revaluate the naira to be on a par with the dollar  (i.e. N1 to $1), the only destructive measure open to the bank, as represented by Lamido Sanusi, is to  restructure the naira currency to include N5,000 note while the former naira currency notes of N5, N10, N20  and N50 are to be reduced to coins, which in Nigerian economic sense would become so worthless that you  cannot get any substantial goods to buy with the new coins as it is the case with the ones that have gone out  of circulation.

That the CBN would be gaining N7 billion every year if N5,000 is introduced into our monetary system is not  intelligent enough. Such step will only lead to economic hara-kiri, resulting in reflation of the already  hyper-inflation, which is  disarming the spending pattern of the common man whose purchasing power has been  weakened due to the 26 years of devaluation of the naira. Therefore, the verdict of CBN that it would help  the so-called cashless policy to carry less volume of naira in circulation is unacceptable. It is an empty  economic proposition, signifying nothing, but to destroy our economy.

Nigerians now know better, the main purpose of stubbornly refusing to shift ground is because our emergency  billionaires will be able to carry from N5 million to N10 million in their (Owa nbe) parties to spray  girlfriends and mistresses to satisfy the devilish aspiration of some insignificant number of persons to the  economic detriment of the majority of Nigerians.

We assume that what should be paramount to the CBN at this period of its inconsistency in its economic  postulation is to revaluate naira to its former level of N1 to $1 in 1986, so that the naira would regain its  strong value of one naira to one dollar.

Mind you, Ghana which was one of those developing countries like ours, that was asked to devalue its currency  in 1986 was able to revalue its Cedi in 2007 July, from over 1000 Cedi to 10.25 Cedi to 1 dollar. Since then,  the economy of Ghana has remained stable to the extent that many Nigerian industries have shifted to Ghana  where there is steady electricity supply to run their plants and produce maximally. They also provide jobs  for Ghanaians abundantly. Wherever you have stable economy, democracy would thrive. Ghana is leading  democracy in Africa. Many women traders now flock to Ghana to transact business, like they used to do in  those days with Beirut in Lebanon, and of recent with Dubai. Many Nigerian undergraduate students prefer to  attend Ghanaian universities nowadays than Nigerian universities. Schooling in Ghana at present is like  schooling in white men’s countries. That is to show you that dividends of stable economy and democracy have  manifested in Ghana.

In the same year, 2007, Prof. Chukwuma Soludo, CBN boss, also announced that by August, 2008, he too would  restructure the value of the naira (of N127 then  to $1) to N1.25 to $1 because Nigerian economy was also  doing well to be restructured. But his masters would not allow him to do that because it would jeopardize  their business ventures, which allow the valueless naira to circulate in quantum within the nouveau riche  few.

Nevertheless, we thank God that Soludo was cautioned, because the one year moratorium given to national  looters of Nigeria’s treasury would have had the necessary opportunity to normalize their loots and those of  their mistresses and cronies.

However, Mr. Lamido Sanusi don’t be deceived that the best way to restructure the naira to attain its lost  value is now.

Announce tomorrow that the value of the naira to dollar is one to one, the heavens will not fall, it is the  treasury looters that would die of shock. And whatever amount of naira in the pocket of any Nigerian will  move to 158% increase in value. That will augur well for our economy. There will be no need to use N40  billion to print N5,000 notes because the little amount in your pocket will be enough to sustain you. Prices  of commodities in the market would fall, empowering everybody to operate economically within his financial  means without regret.

After all, on several occasions, you too have pronounced that the economy is doing well like your  predecessors. The day you pronounce that N1 is $1, every Nigerian will breath the air of economic  emancipation. Adjustment mechanism will take place naturally, and within three months, inflation will  disappear from our markets. This is the truth which you are bound to embrace, if you don’t want your fellow  country citizens to continue to wallow in abject poverty.

•Lasisi wrote this piece from Lagos. Tools That Matter

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