Monday, August 27, 2012

Random Thoughts on the N5000 note

The perennial problem with my phone's keypad is here again, so blogging on the go has become difficult - but let us see how this goes.

One of the most discussed and debated items of news online recently is the CBN's proposal to introduce N5000 notes, and convert denominations from N50 downward to coins. Me too I wee now say my own:

There are no two ways to it: this move does not make sense. I'll share some reasons, and you can feel free to add more in the comments section...

1. The CBN is spending a lot of money promoting a cashless economy. Transactions involving large sums are expected to be conducted without recourse to cash. Why then is the CBN providing a larger denomination - making it easy to carry more money around?

2. In the past four months (in Lagos), I have not encountered an ATM that dispensed N500 notes. Banks, trying to pack as much money as possible into the limited space of an ATM, have completely done away with the N500 note. Imagine the future, where your ATM withdrawals are limited to multiples of N5000 only... Exaggerated, right? Just watch... :)

3. Have you taken public transport lately? Can you imagine a conductor giving you two coins as change? Of course not! That is what I thought... Walking through a Nigerian market today, one would think the lowest Naira denomination is N5. The cheapest thing you can get today is N5, partly because that is the lowest denomination on a note. These days, even sachet water does not sell for N5 anymore... If N50 becomes a coin, you can say hello to a Nigeria where the cheapest transport fare anywhere is N100.

If the CBN wants to do anything about the Naira...let them knock two zeros off the Naira! Let N1000 become N10, let N500 become N5, let N1,000,000 become N10,000...

I hear my suggestion has some not-so-nice economic implications... Who can explain?

That is all I can think off at the moment... Thoughts, anyone?
Sent from my mobile device.


  1. I personally agree with you on number 2! It affects us students especially, as most of us are not accostumed to withdrawing much! . . . Do Check my blog out>