CAVEAT EMPTOR
I recommend this book to Nairaland: Growth Map by Jim O'Neill (An optimistic economic write up by the man who coined the term BRIC: Brasil, Russia, India, China.)

P.S. If any Nairalander has access to Sanusi and some of the nations key economic policy makers you can buy for them as a gift for casual reading.

The 3 secrets to economic prosperity;

1. Fight Inflation
2. Fight Inflation
3. Fight Inflation

Its not a good sign when the population cannot guarantee the value of the Naira in their pockets or in Banks.
e.g. Is there a guarantee that my N 2,000,000 that can buy a car today, will be enough to buy 4 cars tomorrow or just one keke Napep?

Redsun.. If you vex go knack head for wall.
How dare you open those two flaps call me a sissie.
Even if we agree the man is evil upon this nation, he has contributed as an icon known for decisive action and not GEJ letting ministers and a CBN governor dictate the destiny of Nigerians without question.

[ INDEED WIHT SANUSI AS CBN GOVERNOR AND DUDE IN VILLA, WITHOUT AN URGENT INTERVENTION BOTH OF THEM WILL RUN NIGERIA INTO ECONOMIC CATASROPHe[/quote]

You have hit the nail on the head!

They all keep attacking OBJ but they have ALL-TOGETHER not achieved 5% of what OBJ achieved!

ICAN STATEMENT ON THE INTRODUCTION OF THE PROPOSED
N5000 CURRENCY NOTE BY CENTRAL BANK OF NIGERIA

PREAMBLE

The attention of the Institute has been drawn to the August 23, 2012 Press Statement by the
Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi in which he
apprised the nation of the apex bank's plan to restructure the existing profile and redesign the
Nigerian currency for the sum of N40billion. Given the spontaneous reactions of stakeholders,
the Institute is constrained to make the following observations and recommendations.
1. We commend the initiative to redesign the security features of the nation’s currencies with a
view to reducing the huge annual royalties paid to foreign interests and also make the
currencies extra secure. Such measure in our view will reduce currency counterfeiting and
enhance the confidence of Nigerians in this medium of exchange.

2. There is nothing fundamentally wrong with the idea to introduce the N5,000 as there are
some benefits to be derived. Beside having the potential to reduce royalty payments on
existing security features as well as the cost of printing and maintenance of the currencies,
the initiative will enhance the profitability of the CBN and its ability to generate funds for the
government. It is common knowledge that the CBN orders, prints, mints, handles and sells
currencies to money deposit banks with which they carry out their intermediation functions.
The margin between cost of printing and selling of currencies is one of the CBN’s sources of
fund. Although the cost of printing each denomination is the same, higher denominations are
sold to banks at a premium and therefore, earn more for the CBN. Section 5(3) of the CBN
Act 2007 requires that at year end, 75% of its net surplus must be paid to the Federal
Government. Here lies an incentive to earn more money. In addition to this, the cost of cash
management by banks will further reduce with positive impact on wealth creation.

3. In spite of the above benefits, we are not persuaded that the N5,000 denomination should be
introduced. At a time when the size of government deficit is about 2.8% of GDP (although
within acceptable limit), the intention to spend N40billion for this exercise appears to be both
a waste of scarce public resource and misplacement of priority. Set against the benefits, the
proposed expenditure of N40billion will add little or no value to wealth creation. The
subsisting budget deficit, financed largely with domestic borrowing at an unsustainable rate,
and therefore crowding out available credits to the economy, can further be reduced by this
huge expenditure of N40billion, if redirected to the funding of infrastructural development.

4. In our view, the introduction of N5000 note will eventually alter the pricing structure of
products in the market leading ultimately to the permanent disappearance of the 5, 10, 20 &
50 Naira notes (and even the proposed new coins) from circulation. The extinction of these
smaller denominations will negatively impact the buying capacity and habits of low-income
earners and the poor as goods and services will be priced above their levels. Sustained
increases in prices may the unintended consequence.

5. Also, we strongly advocate that the CBN should work towards strengthening the purchasing
power of the Naira through policy consistency. The steady slide in the value of the Naira in
relation to other currencies like the USA dollar, British pound sterling, etc, as an importdependent
country should be a major source for concern. As an import-dependent nation,
when Nigeria converted to Naira and Kobo in 1973, the exchange rate was GBP£1=N2.00
and USA$0.30=N1.00. Today, the exchange rate is now GBP£1=246.31, USA$1=N157.50.
From the literature and empirical experience, devaluation benefits export-oriented
economies. As a mono-product and import-dependent economy, we are most unlikely to
benefit from the resultant devaluation that this initiative may unwittingly cause. Since the
Naira is not convertible, increasing the denomination will not check the perceived trend
towards dollarization.

6. The CBN’s repeated change in its monetary policy rate is an indication of severity of
inflation which it has been targeting for some time. If unemployment was lower, it would not
have been a cause for worry given the established inverse relation between unemployment
and inflation. To print more currency as envisaged without earning foreign revenue to
support its value will put more inflationary pressure on the Naira and lead to a diminution in
its value. Indeed, one of the indices of a growing inflation, from economic history, is the
creation of higher denominations as exemplified by Argentina, Peru, Poland, Russia,
Democratic Republic of Congo, Angola, Zimbabwe, etc.

7. The aforementioned press statement of the Governor did not indicate whether the
introduction of the N5,000 notes will involve the printing of more currency notes to
complement the existing quantity of money in circulation or it intends to substitute some
smaller denominations with the proposed new note. It merely said that some currencies will
be converted to coins. Whatever, the intention, we shudder to think that the CBN plans to
increase the quantity (volume) of money in circulation by introducing N5000 notes when the
possible inflationary impact of this is common knowledge! Or does the CBN want to
substitute higher denomination for smaller, more convenient, ones when Nigerians are
yearning for enhanced value of the Naira that will lead to the return of Kobo coins? Who is
the beneficiary of a denomination that will stall transactions in rural Nigeria inhabited by
70% of the populace? Only the convenience of the elite and urban dweller will be assuaged.
Following the CBN statistics that 90% of Nigerians’ cash transaction is less than
N150,000.00, why substitute their preference for higher denomination? Is it not obvious that
small transactions will be made more difficult if a proportion of each smaller denomination is
eliminated?

8. We are persuaded that the initiative will impair the modest gains recorded with the Anti-
Money Laundering Act and the pilot cashless policy in Lagos which the Institute expects to
spread to the entire country by first quarter of 2013. The convenience of carriage of N5,000
notes will indeed, be an incentive, not disincentive, to carry cash. Such an incentive will
defeat the acclaimed drive towards a cashless economy. If the international community
perceives that we are lax in anti-money laundering agenda which higher denomination and
convenience of carriage connote, we stand the risk of being the target of FATF initiatives
including blacklisting with its attendant problems for the attraction of Foreign Direct
Investment. This is an untoward route that we have taken before. It should be avoided.

9. The heroines or amazons to be honoured- Mrs Funmilayo Ransome Kuti, Mrs Margaret Ekpo
and Hajia Gambo Sawaba (of blessed memory) - deserve all the possible posthumous
recognitions available because of the profound contributions and enduring legacy they made
to humanity particularly, the less privileged. They represented the finest women of their era
and even today, set against all best practice parameters, their achievements tower. Indeed,
they were rich in ideas, principles and strong in character. As dogged fighters for the rights of
the downtrodden, honouring them with the highest currency denomination belies their proproletariat
stance. They never made any pretensions to pro-elitism and should not be painted
in that light.

10. Finally, the national economy is confronted with a lot of challenges requiring ingenious
strategies to overcome. The cost of doing business is among the highest in the world; the
very high unemployment of youths is creating a lot of social dislocations and security
challenges (graduates of tertiary institutions are now hired as drivers and security guards!);
double digit inflation, etc, have continued to impair the Human Development Indices of
Nigerians. These, in our view, are more critical issues for the CBN and managers of the
Nigerian economy. This indirect devaluation of the national currency is unacceptable. Let's
work towards making the N100 the country's highest denomination in the true spirit of a
cashless economy.

Mr. Adedoyin Idowu Owolabi, BSc (Econs.), MILR, MNIM, FCA
48TH President/Chairman of Council
The Institute of Chartered Accountants of Nigeria

Its now I see that so many people in this house are just daft and easily sell out dont we know Sanusi is already a sunk man at the midst of Ocean seeking for distraction to achieve his silly plan of N5,000 Note?? How come he now single out Obj and say all these craps And now many in the house quickly buy his silly cheapy talk. This guy called Sanusi is playing smart on every Nigerians to have his way so let him just shut a hell his stinky mouth, Nigerians has spoken No to N5,000. So either OBJ is bad economist or not that is not what we are saying now the hot issue on ground now is N5, 00 note period!!!

This was how this idiot called Sanusi hooked up the silly "House of Misrepresentative" oh sorry I wanted to say House of REP. the other time by saying they earn more than thier real wages and threaten to exposed them thereby used that as weapon to silent them and since then Sanusi has be having his way in every decision he made pls enough of this craps Sanusi can not always have what he want Nigeria is NOT KANO state but a NATION.

Lamido Sanusi or Sanusi Lamido or whatever he is called is one of the "NIGERIA NIGHTMARE". A serious educated "VIRUS"

In a city like Port Harcourt, 5 naira note is hardly in use,so what will happen to 10, 20, and 50 naira notes if 5000 naira note is introduced?

Sanusi is jst an indiscipline guy. Probably he didnt grow up under his parents, dat why he doesnt have respect fo elders nor human feelins. I dont jst see him as a bad economist, but an agent of the enemy of progress. Yes, it is true dat obj introduced higher denominations, but dat doesnt deny him d rite to air his view. i want to ask, wats the nigerians reactions then and wat is the reactions of nigerians now? We nid to knw dat sanusi is not there for himself, but he is servin nigerians. He is fond of imposin policies on nigerians whom he serves. In all his policies, wat has he achievd so fa? Frm restructurin of banks, cashless and wat have u, we have banks closin down and hundreds of nigerian yuths losin their jobs, despite billions of nairas pumped into those banks. If som of u are hailin sanusi as an economist, then he is a bad one and i cant jst figure out where he is takin us to. And i leave u wit dis. COMPARE SOLUDO AND SANUSI policies and see where sanusi is takin us to. Must of banks dat survived soludo's policy (25bn capitalisation base) are stil doin wel. Not to talk abut soludo's planned deletin of a zero frm ich denomination, which one wuld hav paid more? compared to changin notes to coins and introduce 5k note?

Forza p: Sanusi is a good EMIR but a bad economist.no story

Has he being an emir before? how do you know? because thats his ambition?

Mr Obasanjo actually is not a good farmer! But a clever criminal!

By 1999 his OTA farms was worth less than 20,000Naira.

Mr Obasanjo basically stole our common wealth to re-build his farm!

Operation Feed the Nation = OFN = Obasanjo Farms Nigeria( that was how he siphoned our money back then)

If truly Mr Obasanjo is a good farmer.. where can nigerians buy produce/product from his farm?

miteolu: SANUSI is playing with his job, no one has dealt with Baba Obasanjo that go unpunished.

What a fresh drama '' ACT 1 SCENE 1

Not SLS. Story is told of when he was ED (Risk mgt) at FBN in 2005, he refused to sign a document that would sort of coerce FBN to buy into the Transcorp(Obasanjo's boys project) bubble then.

whoever support that DEVIL Sanusi for printing 5000 Naira note is an enemy to to Nigeria as a country.
they are making it easy for themself to loot the nation, look at Ghana today after reducing their currency and things are going well for them.

SLS is doing his own 'national awards'. At any rate, the three women he is awarding are perhaps better off than the modern day highest bidder 'GCONS' whose records and reputation are highly questionable.

Sanusi or what ever he calls himself must be on some Afghanistan weed, when ever he takes a drag he gets inspiration on how to destroy Nigeria. why create cashless banking when you have plans for 5000note, does not make sense.making kidnappers,and other federal,state and local government thief to carry money easily not damning the consequence to the Nigeria economy.we All need to join hands and pray for his remover fast, cos i know this money has already been printed waiting to be circulated come January 2013. as usual the senate will call him and he will speak to those bags of illiterate and the circulation begins, so its better for him to leave now then the damage is done.

pato405: sincerely, I doubt if this Sanusi of a man really studied Economics. i'm beginning to think he is one of this Toronto certificate bearers. Sanusi has no economic sagacity. TOTALLY DUMB! words cant explain how disappointed I am now. Economic principles should be applied relative to social and cultural contexts in cases like this. you don't just take everything you read in the book hook, line and sinker. as a matter of fact, while all these economic strategies are not bad, they should be applied only after other related factors are considered [what scientific research will call cofounding factors - i.e 'all things being equal'] a medic will not prescribe certain medication to a patient even though it's the right medication for the ailment if the patient has certain conditions. i.e conditions described as contra-indications.

Nigeria should not be compared to other countries arbitrarily. socio-cultural dynamics differ a lot. people are busy comparing UK,japan. US etc to Nigeria forgeting that in these countries, people don't haul currencies the way most Nigerians do. they have many avenues to control money in circulation. technology in shops, supermarkets, and other business places has made it so easy to ,make payments without touching physical cash. in other words, they have gone cashless. how many Nigerians have access to e-cards, master cards, Visa cards, maestro etc or even online payment for petty things as people do on ebay and other websites?

for a developing country, this ecomnomic step sanusi is advocating is just absolutely useless. the highest denomination in UK is £50 but you hardly see it in UK. the ATM's hardly ever spin out £50 as a matter of fact I haven't seen any ATM spinning £50. the argument that N5000 is only for high volume transaction and not for the poor does not hold water. physical cash flow in Nigeria is very rapid and random, you cannot control it and thus, cannot make it a denomination exclusively for the rich. people will soon regard it as status-symbol, flaunt it, spend it whenever and where-ever. Many will board public buses and tender it in payment for a N50 fare and when challenged, they'll claim there is no other currency on them.

introducing coins is a no no. Nigerians are averse to it. if Sanusi is insisting on introducing those coins, then I don't think Obj's argument is wrong afterall. it'll surely encourage and 'foster' inflation because hauling coins is not just in the culture of the people. in Uk, you sometimes stumble into people having special purse for coins but the average Nigerian will NOT do that. it's just a cultural thing. just imagine a bus conductor with coins in 'paint bucket' or where exactly? how many of that will he need in a day? that will surely compel them to raise T-fares to the nearest naira note! and what do you call that? deflation?

lets leave coins for now. N5000 is nothing but disaster. Sanusi should pls wake up from slumber and delusion. study societal dynamics first before looking into applicable economic principles. it will increase ease of hauling physical cash and such should be discouraged from cashless policy perspective.

A fundamentalist belief in scriptural literalism is one of their traits. what do we expect? SMH

[quote author=Acidosis]I agree, 100%.

obasanjo ıs a very ıntellıgent man,he mıght not be the best leader...but certaınly more ıntellıgent than a large majorıty of us,n certaınly more than sanusı.Sanusı should know dat he ıs there to serve us or resıgn,dat posıtıon ıs not hıs rıght but rather a prevıledge to serve.ıts arrogance 2 open mouth and try to rıdıcule the ıntellıgence of a man that ruled our natıon 3tımes and delıvered power twıce to democratıc prıncıples.

SOLUDO = SOLUTIONS
LAMIDO = LAMENTATIONS
OBJ = OBJECTIVITY

Ola one: Obasanjo's an old fool, anyway.

He introduced 4 denominations yet he's talking shiit as usual, smh

And you are a young ignoramus.

Confirmed i'm in full support of this
There is but one path.....
We Kill them!!
We kill them all!!!

(Spartacus)

petnkool: BY THE TIE THERE IS A TRUE RADICAL REVOLUTION IN THIS COUNTRY . ALL THESE COCONUT HEADS CALLING THEMSELVES ELITES WOULD BE ENDING IN JAIL IF NOT LYNCHED . THEY KEPT DEVISING WAYS TO FOAM MONEY FROM THE PEOPLE THROUGH ASSORTED POLICIES UPON POLICIES ...MANY OF UNA "MUMU" NO SEE AM . ANYWAY , TWO THINGS ARE INVOLVED :IT IS EITHER THEY TURN NIGERIA UPSIDE DOWN TOR WE START LYNCHING THEM NOW .

Sanusi should stop talking trash. What does he know about the economy? His only contribution to Nigera is sponsoring boko haram, with introduction of islamic banking.

Both of them were thieves,because OBJ used re denomination to steal money that masses were still suffering it,must Sanusi used the same method and add to the sorrow of masses

Genius100: The truth here is that most Nigerians are i-diots. When the story broke about what OBJ said, there was an accompanying video. In the video, OBJ clearly said if the sole focus of the CBN governor is fighting inflation, then production will suffer. HE NEVER SAID INTRODUCTION OF N5000 WILL KILL PRODUCTION. But guess what, a newscater that actually showed the video claimed OBJ vehemently disagreed with the introduction of N5000 becuase it will kill production. Most Nigerians are simply incompetent...

Genius100: The truth here is that most Nigerians are i-diots. When the story broke about what OBJ said, there was an accompanying video. In the video, OBJ clearly said if the sole focus of the CBN governor is fighting inflation, then production will suffer. HE NEVER SAID INTRODUCTION OF N5000 WILL KILL PRODUCTION. But guess what, a newscater that actually showed the video claimed OBJ vehemently disagreed with the introduction of N5000 becuase it will kill production. Most Nigerians are simply incompetent...

Genius100: The truth here is that most Nigerians are i-diots. When the story broke about what OBJ said, there was an accompanying video. In the video, OBJ clearly said if the sole focus of the CBN governor is fighting inflation, then production will suffer. HE NEVER SAID INTRODUCTION OF N5000 WILL KILL PRODUCTION. But guess what, a newscater that actually showed the video claimed OBJ vehemently disagreed with the introduction of N5000 becuase it will kill production. Most Nigerians are simply incompetent...

Since OBJ was being asked questions on Sanusi' reform, then the newscater is right to have assumed that he opposed the introduction of the new note. That is just what i feel

Dee60: They all keep attacking OBJ but they have ALL-TOGETHER not achieved 5% of what OBJ achieved!

Can we hear Obasanjo's acheivements?

2mch: Sanusi is a bad economist, but a good turban wearer. . OBJ did not make any wrong assertions. If it doesn't make sense to Sanusi. Then his coconut brain needs to go on exile.

I no fit shout! Guy, take it easy on mallam. Sometimes, too much work can affect a person's comprehension ability and i guess SLS is over working himself lately.

toluxa1:

My brother, twist it however you want but the truth is that, that was what he actually meant. He may not have said it in those exact words but go and listen to his speech again and you'll CLEARLY see that was exactly what he insinuated. We are not small children or dullards that somebody will come and be saying "he didn't actually say so so". I'll be ashamed if OBJ himself comes out to say that. He definitely won't.

This is a great disappointment!

Do you mean to say someone emphasizing on what was seen and heard on a Channels TV is twisting and you that is conjuring up some weird insinuation here is not a child?

It is even you that should go back to that video and watch carefully.

Look, Obasanjo that we all know does not insinuate, he does not speak tongue-in-cheek, he has never been afraid to speak his mind, you would rather kill him. If he wanted to say 5000 naira bill's introduction is wrong he would have said it clearly without giving a hoot about it.

Obasanjo actually praised Sanusi from the clip shown.

He said what he is doing is good, the only caveat was that he was targeting inflation ALONE!!!

Now, this is a very let down on the intellectual capacity of Mallam Sanusi Lamido Sanusi himself.

How can he answer Obasanjo without seeing the video for him to prepare an appropriate response?

Has he been governing the CBN based on mere rumors and newspaper reports all this while?

I think Sanusi should get the video and apologize to Baba!

Obasanjo was just re-echoing what ECONOMISTS and FINANCIAL EXPERTS all over the world have said time and again of the difficulty in balancing the trio of INFLATION, INTEREST RATES AND EXCHANGE RATES.

One aspect of me was eager to hear a robust defense from the Mallam knowing fully well that he's capable of defending his actions. I thought he would use the space and opportunity to lecture the nation as a Soludo would do and as central bank governors would normally do in similar circumstances on the reasons for his inflation targeting alone.

Unfortunately, it is this sort of primitive argument that came from the CBN governor of a while nation.

It is too childish for Sanusi to go to the level of BAD ECONOMIST, GREAT FARMER theory.

It is simple economics that when you are targeting inflation ONLY (mopping money from circulation through TB issuance, raising cash requirement of deposit money banks, dominating/determining the sales of foreign exchange etc) interest rate will be prohibitive and production suffers as a result of inability/difficulty of businesses in accessing credits from the banks, therefore unemployment will naturally increase because businesses cannot hire.

And when there is low interest rates, there would be high consumer spending due to much economic activities which in turn leads to rise in inflation. It is a difficult balance that central bank all over the world are dealing with. Now when you are focused on the former in an economy with high unemployment like Nigeria, you should have more compelling reasons and the temperament to explain to the citizens why you are doing that.

Sanusi should rather defend his inflation targeting measures than this elementary response of FARMER and CHICKEN.

We demand more from our central bank governor than this.

It was the same hyper reaction to the IMF warning a couple of years ago about the danger of using the reserve to defend the naira. Sanusi could not give a coherent defense other than some sentimental politicization of the debate back then. He should remember that he is not an ordinary man on the street who can just be reacting to silly beer parlor comments anyhow.

In 2012, central bank governors everywhere speak like economists not like politicians who like to be clapped for in the public. We need a measured, coherent, articulate, brilliant and knowledgeable comments from the CBN governor henceforth.

By the way, I am in support of the 5000 naira note introduction.

thelastPope: The most interesting question no one is asking is, how do you talk about a cashless society and then go on and promote an idea that will help people carry more cash. It is a grand irony.

The CBN has said that the new 5000 note is aimed at making it easy for those who do businesses that require large movement of cash. Why do you need to make it easy for anyone to move cash in a cashless society. What happened to electronic payments and bank assisted payments for staff? I just don't get this Sanusi guy. The guy definitely doesn't know what he is talking about.

Simple!

Cashless policy says you cannot withdraw/deposit more than #500,000 in CASH.

#500,000 in #1 coin is not more than #500,000 in #5000 note.

It is the same value.

You cannot withdraw/deposit more than #500,000 in any cash denomination.

It will not help you carry more cash because they are have not increased the limit yet.

They should have left the maximum withdrawal/deposit limit at #150,000 though!

I have much more dirt on Obasanjo !!

Mannylex:

My friend who are u posting this "term paper" for ? Waste of space!

wellmax: Obasanjo did this, did that more than any other Nigerian leader, have you forgotten he served longer than any other Nigerian leader? And at both times led this country through difficult times? Whether you accept it or not, Obasanjo made more impact and understand Nigeria than any other past or present leader. He is Nigeria's best leader so far. And YES! He has his own inadequacies.

thru bro,
i will advice the mallam to listen to the old general. He's been there before and understands more.
As for the general, hope you now know how it feels. Now your no more in govt and you can sense it (N5000) telling of farm produce.

OBJ is a gud farmer at the same time a gud economist. Because he knows what exatly d nation is passing through before he made such statement. He knows that, that #5,000 note is not meant 4 the poor but 4 d rich. If I may ask, how many poor Nigerians holds #1000 notes on daily/weekly basis per month. Then how much does the govt set as a basic pay per hour 4 their citizens b4 the introduction of #5,000 note. Then if d question is correctly answered. Who among them is a bad economist.OBJ/SANUSI?

Nigerians sha!!!

I don't known why you are worried. Is it your money? How many of us make 50 grand, what is the minimum wage?

The guys who steal all the money have decided the denominations they want, to facilitate looting and storage. exchange and logistics.

What are you doing to stop then? NOTHING

Docile people ? NOTHING

The CBN governor said that during the period Mr Obasanjo was introducing high denomination inflation in Nigeria was actually low.

“General Obasanjo did N100 in 1999; then he did N200 in 2000; he did N500 I think two years later; and did N1000. In that period, inflation was coming down because it was accompanied by very tight monetary and fiscal policies during his reforms.

freechat: The CBN governor said that during the period Mr Obasanjo was introducing high denomination inflation in Nigeria was actually low.

“General Obasanjo did N100 in 1999; then he did N200 in 2000; he did N500 I think two years later; and did N1000. In that period, inflation was coming down because it was accompanied by very tight monetary and fiscal policies during his reforms.

By this statement, Sanusi has inadvertently admitted that Obasanjo is a GOOD economist. If not, why would he like to tow the same path?

By this statement, Sanusi has inadvertently admitted that Obasanjo is a GOOD economist. If not, why would he like to tow the same path?