The apex Central Bank of Nigeria (CBN) has dismissed the criticisms of its plan to introduce a 5,000 naira (US$31) currency note as the country’s highest denomination, saying the criticisms had no basis in economics.
A barrage of criticism has greeted CBN’s announcement, with most of them warning that it would trigger inflation and others arguing that it contradicts the government’s cash-less policy.
But CBN spokesman Ugochukwu Okoroafor said in a television interview that the plan was in line with international best practices, while challenging those against the plan to make public any theory that opposes higher currency denominations.
”I have heard that the introduction of the N5,000 will bring inflation. I challenge anybody, who is an economist to tell me an economic theory that says when you have a higher denomination in your pocket, it will change how you spend money.
”If you have N100,000 in your pocket, will it change the way you spend if you have a bag of N100,000?” he queried.
The plan to introduce the 5,000 note is part of a process that will also see the conversion of the 20, 10 and 5 naira notes into coins.
The CBN has said it will spend 40.3 billion naira (US$249 million) to produce the new coins and naira notes.