The media sphere has been agog with news of the Central Bank Governor, Lamido Sanusi‘s reaction to former President Olusegun Obasanjo‘s recent statement against the introduction of the new N5000 notes and from it, I picked up something interesting I wanted to share.
In his reaction, the Central Bank Governor was quoted as calling the former President “a good farmer but a bad economist”.
Earlier on, Mr Obasanjo had criticised the introduction of new N5000 notes saying it would increase inflation. He also added that it would kill production and affect small businesses negatively.
However, Mr. Sanusi in his reaction said that he was surprised that the former President could oppose the proposed N5,000 note given that the high currency denominations in the country, including N1000 note, came into being during his (Obasanjo) regime.
“This is an interesting country because my uncle or my father, who is our former Head of State, Gen. Obasanjo, you know he is a very successful farmer, but he is a very bad economist. He stand up and says that this higher denomination will cause inflation and improve hardship,” Punch quoted him as saying.
And he continued: “Gen. Obasanjo did N20, he did N100, N200, N500 and N1,000. He introduced higher denominations in Nigeria than any other head of state. He did a N100 note in 1999, he did N200 in 2000, he did N500 two years later and in that period inflation was coming down because it was accompanied by prudent fiscal and monetary policy.
“For somebody (Obasanjo) who had done this to stand up and say introducing a higher denomination will cause inflation must be an empirical, most important determinant of inflation in our country given the number of notes he had printed.”
His statement got me wondering if introducing new currencies and other such economic policies were the responsibility of the President rather than the Central Bank.
The planned introduction of the new N5000 notes has been greeted with wide spread resistance. This also gets me thinking; who are the opposers of the new notes supposed to direct their grievance to – the President or the CBN governor?
Also, what are your thoughts on the CBN Governor and the former President’s arguments for and against the new notes?