I still can’t figure out the relationship between cashless economy and introduction of 5,000 naira note. From my basic understanding, cashless is the process of reducing the volume of cash transactions with the introduction of electronic point of sales system (POS). Cashless can also be use as a tool for check and balancing of movement of fund ie to control highly volume of cash movement and money laundering.
The new 5,000naira not will jeopardize the definition stated above because of the following reasons: -
i. The new not will make it more convenient to move around with high volume of cash e.g I need only 200pieces if 5,000naira notes to move around with N1million. So what is cashless here??
ii. The new 5,000naira note will contribute adversely to Nigeria economy i.e increasing the rate of already existing inflation.
iii. The corrupt politician will find it easier to launder money with new note.
iv. The new note will make the gap between the rich and the poor wider.
v. The new 5,000naira notes will devalue the small denomination e.g N20, N10 and N5 notes no longer command economic value. Most people will not receive change if it is N5 or N10.
vi. The new 5,000naira notes will deteriorate the current purchasing power of Nigeria. E.g the benchmark for pricing may possibly increase from N100 to N200 or N500. It will reduce the purchasing power of N50 or N100. E.g an item that ordinarily should go for N2,000 or N3,000 may like go for around N5000
vii. EFCC will need to increase money laundry amount to make it meaningful
If we want our Nigerian economy to be like that of Europe and Americans, CBN should emulate their currency structures. GBP is not more than 50pounds denomination while USD is not more than $100 denomination and euro is not more than 500euro denomination, so I do not understand the CBN rationale for planning to introduce N5000 denomination at this point in time. If this policy is intended to help cashless program to succeed, then it will cause more harm than good because the spirit of cashless is to encourage people to utilize e-payment option more while in effect reduce the cash based transactions. Introduction of N5,000 note will make it easier for people to carry high value cash and will provide fraudulent politicians the needed visa to carry more stolen money in “Ghana must go”.
Solution to Nigeria micro economic problem should not be the introduction of higher denomination of our currency but rather empower the masses to increase production of goods and services and create employment for the citizens.
In conclusion, is these the right time to introduce higher denomination of N5,000 and N5, N10 and N20 coins into the already deteriorated Nigeria economy? We all know Nigerians are not ready to use coins again the FGN introduce it before, where are they now, they are no where to be found, lets plead with the Government not to waste Nigerian money on printing of coins again.
Ladies and gentlemen, I humbly and wholeheartedly SAY NO to the introduction of 5,000naira notes. Let’s embrace what is happening in developing countries like UK, USA etc.
God bless Nigeria
God bless ICAN
Kazeem Ayinde AAT, ACTi, ACA
(accounting expert, tax expert)
Kaz4sure@yahoo.com, 08062144529
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