Obasanjo, Nnamani allay fear on N1,000 note

13.10.05

President Olusegun Obasanjo, Senate President, Chief Ken Nnamani and Central Bank of Nigeria (CBN) Governor, Prof. Charles Soludo, yesterday, allayed fears over the new N1,000 note, formally released for circulation.

Both President Obasanjo and Prof. Soludo also said the new note will not cause inflation adding that beginning from December 2006, minting of the nation's currency denominations - coins and notes will be done locally by the Nigerian Security Printing and Minting Company Limited (NSPMC).

Senate President, rising in defence of the new N1,000 note said: "it makes sense that a cash economy like Nigeria should have N1,000 note.

His defence came as President Obasanjo told the Senate that the exclusion of State High Courts to try financial crimes by the Economic and Financial Crime Commission (EFCC) was affecting the work of the commission.

Meanwhile Speaker of the House of Representatives, Hon. Aminu Bello Masari, revealed that the legislature lost N827 millon to two failed banks

Speaking at formal launch of the N1,000 note for circulation as legal tender, which preceded the weekly Federal Executive Council (FEC) meeting at the State House, Abuja, President Obasanjo said spending of the highest denomination "doesn't lead to inflation".

He, however, advised that extra care be taken in moving the denomination for transactions because of the huge loss one could incur due to its higher value.

While commending the apex bank board and management for working in line with reform policy of the government, the president disclosed that local production of national currency and other sensitive security documents was being vigorously pursued.

"The issue of being locally self-sufficient and self-reliant in the production of our notes and all our security documents is being vigorously pursued", he said while commending the CBN and its technical board managing the NSPMC for moving in the right direction.

President Obasanjo further emphasised that on-going reform programmes would be comprehensive and all-embracing adding that no aspect of the nation's life would be left out.

He however challenged the apex bank to prepare itself for the possibility of taking on added responsibility as the continent moves towards evolving a common currency and Central Bank for West Africa.

"I want to challenge you that, as we move towards common currency in West Africa and towards a Central Bank of Africa, we should prepare ourselves for the possibility of taking on added responsibilities, both in terms of the work of our own Central Bank and in terms of our security printing", he said.

President Obasanjo added that the administration was also working towards making the use of consumer credit cards popular in a bid to make the economy less cash-dependent as well as lessen the burden of cash transaction.

Earlier, CBN Governor, Prof Soludo explained that evidence from past issuance of higher denominations showed that it did not cause inflation or depreciation of the Naira.

"The new higher denomination does not lead to inflation, nor does it lead to depreciation of the currency. And indeed, the evidence from the past issuance of higer denominations shows that there is actually no basis why it should lead to inflation or depreciation of the currency. The new naira note does not necessarily increase the quantity of money in circulation", he stressed.

As part of on-going currency restructuring by the bank, he said emphasis was also on the production of lower denominations, pointing out that more coins would be produced as part of national exchange.

Added he: "We are expecting that from next year as we would declare in terms of formal policy, by the end of December 2006, all currencies and coins circulating in Nigeria will, and must be produced by the Nigerian Security Printing and Minting Company including the N1,000 note."

Giving detailed background on the new note, the CBN Governor asserted that its sophisticated special security features made it forgery-proof, durable and secure even more than the Dollars, Pounds Sterling and Euros.

Prof Soludo also said that " the N1,000 note is the last in the series of the approved higher denominations by President Obasanjo who had earlier okayed the issuance of N100, N200 and N500 in 1999, 2000 and 2001 respectively.

He asserted that issuance of the new denomination was celebration of CBN itself, national history and Nigerian diversity.

Albums containing the front and back specimen of the note were presented to President Obasanjo and Vice President Atiku, bearing serial numbers 0001 and 0002 respectively.