The Trade Union Congress of Nigeria (TUC) has opposed the Central Bank of Nigeria (CBN) currency redesign programme describing it as “a continued and persistent inconsistency in policy objectives.”

The labour centre called on the central bank to immediately suspend the policy and allow it to be discussed nationally before any further action is taken.

It also called on Federal Government to “withdraw its consent to this obvious further desecration of the currency and properly reappraise the objective informing it so that better alternatives which abound could be fashioned”.

The congress maintained that the CBN was not serving the interest of Nigerians in the new proposal as it is capable of further worsening the economic crisis, which CBN’s actions under its present leadership in the past have also assisted in exacerbating.

TUC, in a statement issued by the President General and Secretary, Mr. Peter Esele and Mr. John Kolawole, respectively argued that coining the N5, N10 and N20 denominations would do a psychological damage to the value of the Naira.

The congress wondered why the CBN should consider it too expedient at this time to also pursue concurrently the printing of more currencies especially the jumbo N5, 000 note, if it truly seeks to pursue a cashless economy.

This, it argued would clearly put more cash readily into people’s hands with its attendant consequences of inflation that had been variously canvassed in the time past.

Speaking further, the congress said the new programme would facilitate the movement of large volumes of cash and serve as a better vehicle for handling the proceeds of corruption.

It maintained that the CBN should concentrate effort on creating values domestically that would bolster the value of our currency rather than tinkering with the currency.

“We are surprised that the CBN could at this time decide to embark on the mission to make changes to the nation’s currency and to also create a N5,000 denomination. The intention at coining the N5, N10 and N20 denominations does a psychological damage to the value of the Naira. We consider this a deep confirmation of our fears that those managing the different facets of our nation’s economy do not have time to give deep thought to their policies before churning them out and executing them.

“If the objective is truly the pursuit of a cashless economy, why will the CBN consider it too expedient at this time to also pursue concurrently the printing of more currencies especially the jumbo N5,000 note. We do not understand why those in leadership position will continue shunning the voice of the people especially when the predictions of the people over time have come to be the case eventually in most of the cases. We see this rather as a sign of a monetary system management gone awry and the deeper malaise of the continued wrong – headed management of the nation’s foreign exchange receipts.

“The CBN is clearly not serving the interest of Nigeria and Nigerians in this new proposal as it is capable of further worsening the economic crisis which CBN’s actions under its present leadership in the past have also assisted in exacerbating.

“We do not see any serious value in what the CBN intends to do especially at this time when we are confronted with bigger issues of Insecurity, unemployment, hunger, Poverty, disease, decaying social and physical infrastructure and the deepening of mistrust and widening of the ethnic gaps within the nation,” the congress stated.

This Day

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The dust raised by the impending introduction of N5,000 currency note in January 2013 by the Central Bank of Nigeria will take a long time to settle. Opinions have been divergent following the announcement by the governor of the Central Bank, Sanusi Lamido Sanusi, last week. While some Nigerians have applauded the move, others believe the introduction of such a higher currency note negates the Central Bank’s much vaunted cashless economy. Besides, it will worsen the current high inflation, they argued.

We align with those who believe the negative consequences of the introduction of the N5,000 note far outweigh the perceived advantages. It is on record that each time a new currency note with higher denomination is introduced, the lower currency notes changed into coins become useless. Even though they do not cease to be legal tender, they no longer serve as a medium of exchange because traders reject them for reasons best known to them. We are afraid that this same fate will befall N5, N10 and N20 notes which will be converted into coins in January 2013 when the N5,000 note will be introduced. What it means is that all the items being sold for N5, N10 or N20 as the case may be, will attract a new price tag of N50 which will become the least currency note in circulation. For instance, a consumer item such as sachet water which now costs N10 will go for N50 from January next year. This will definitely worsen the existing inflation and exacerbate poverty in our country. Unless the Central Bank of Nigeria comes up with a strategy to compel Nigerians to embrace the culture of using coins as a legal tender and as a store of value, we believe we may well be singing the death knell for the current N5, N10 and N20 notes.

The cost implication is another sore point entirely. The Central Bank says it would cost N40 billion to mint the new N5,000 note, redesign the existing N1,000, N500, N200 and N100 notes as well as convert the existing N50, N20, N10 and N5 notes into coins. Can’t that huge sum of money be used for something more pressing such as providing jobs for the youths? This is a colossal waste the nation can ill afford in the present circumstance.

The introduction of the N5,000 note will also worsen the level of corruption in the country. It means looters of the nation’s treasury will easily cart away billions without getting noticed. Each time a higher currency note is introduced, the economy is always the worse off. Hence it is a poor decision by the Central Bank which will not do anyone or the economy any good except the corrupt elements who will profit from it by looting easily.

Nations such as Zimbabwe, Zaire, Bolivia, Russia, Angola, etc., had at various times introduced higher currency denominations and their economies paid dearly for it. The case of Zimbabwe is even more profound as the country has one of the worst rates of inflation in the world following the introduction of the Z$100 billion note in 2007. The country has since abandoned its own currency and now uses other countries’ currencies that have higher face value. Sanusi should learn a lesson or two from Zimbabwe whose economy is now in absolute tatters.

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