Average Nigerian: almost 50-50% chance a random draw will pick a male or female who is 17 years of age. Although he/she will live up to 52 years, he/she will have only 9 years of school (8 if female). Lives below the poverty line and if employed, most likely works in the agricultural sector where 70% of labour force is concentrated.
There is something frightening about the distance between the parallel dimensions those in government and the rest of us live in. To the human eye, the distance is imperceptible – nothing more than the cloak of luxury which comes on easier than it comes off. Only when you try to bridge the divide, usually with nothing more than words shaped as questions, do you realize that the space between us might be as far as the earth is from the moon.
Try engaging anyone in government and get them to tell you one thing – just one thing enduring that has been a benefit to the average Nigerian since 1999 and apart from the telecommunication revolution…(which really was just the selling of licenses and it is safe to wager that any exercise in tracking where the money from the licenses went will be futile) there isn’t much to say that is concrete. If they are from the legislative arm they will try to take credit for protecting democracy from President Obasanjo and the cabal and supposedly for the budgetary process. Nonsense – how does this translate into improved basic social services? If they are from the executive arm they will lament the destruction of the civil service by ‘these politicians’ while the ministers will blame the devious civil servants and lazy civil society who are totally oblivious of the intricacies of politics. More nonsense – what will fix the fact that we have two federal ministers of health, 36 commissioners of health and various health agencies and yet every 10 minutes a woman dies of a pregnancy related issue? The judiciary doesn’t even live within our galaxy and so communication is near impossible.
The different worlds we live in is the reason why there is no pretense to try and engage us and get us to understand and buy into government policies such as the alleged removal of fuel subsidy. And the introduction of the N5000 note and related plans to change the N5, N10 and N20 notes to coins is just one more example. Maybe it is because the average Nigerian would not understand the concepts and those of us who can…well we do not really matter because we are the elite who don’t vote.
Maybe some thought went into this decision of the Central Bank of Nigeria but since we are not privy to this thought process many are worried about the implications. The predominant fear is that the N5000 note will cause inflation (or accelerated inflation i.e., hyperinflation). While some experts say this fear is not based on any economic theory, this fear is not totally irrational.
Granted inflation on its own is not bad “as long as the rate of inflation stays below the rate at which wages increase” but the average and above average Nigerian thinks the N5000 note will cause hyperinflation because of the stories we have heard from other parts of the world. For instance, when Argentina suffered hyperinflation, the highest denomination in 1975 was 1,000 pesos, by 1981 it was 10,000. If our wage increase in Nigeria is higher than the rate of inflation – why not just share this information and help assuage the fears?
“The different worlds we live in is the reason why there is no pretense to try and engage us and get us to understand and buy into government polices such as the alleged removal of fuel subsidy. Maybe it is because the average Nigerian would not understand the concepts and those of us who can…well we do not really matter because we are the elite who don’t vote. Despite our low literacy levels and dismal quality of education and regardless of the fact that many of us with multiple degrees have scant knowledge of history and even less about economics, monetary or fiscal policy – we know waste and profligacy in times of suffering and unemployment.”
Two, there are concerns that by moving the N5, N10 and N20 notes to coins, we will relegate these currencies to the bin of disuse and this is where technically the argument for inflation comes in. Several things can cause inflation and one of them comes into play here: the people’s perception of value. Nigerians do not value coins – this is a perception. No one will price anything for these amounts because no one will want to carry them around. This means any transaction where these currencies might have played a supporting role as ‘change’ will no longer be possible. In essence, the cost of certain goods and services will increase. Those in support of the policy say that the cost of printing these notes is too high and the movement to coins will help Nigeria save money. That with the N5000 note, managing ATMs will be easier as they will run out of money less frequently and third, the costs of moving large sums of money will also be addressed. Would it be wrong to ask how many Nigerians would be directly benefitting from these ‘money saving’ ventures? In other words, what percentage of the average Nigerian would appreciate these initiatives? If only 15% of all the women in Nigeria have bank accounts how many Nigerians in total use the ATMs?
The third issue is corruption. Many are worried that in this country ravaged by fraud at all levels, the N5000 note will aid the corrupt and make it easier to walk into offices without the tell tale Ghana-must-go bags and envelopes. Now many can walk in with arms swinging freely while caps, hats and pockets do their jobs. One of the selling points for the ‘cashless society’ campaign was that it would help curb corruption and make it easy to ‘follow the money’ through wire transfers. The cashless policy was not supposed to completely eradicate the use of cash, but we thought the idea was to make cash less convenient, which seems antithetical to the N5000 note. Some argue that the currency of choice for extortionists’– taking a cue from Femi Otedola and Farouk Lawan – is not naira and the N5000 note will not increase corruption. But will it facilitate it? In the balance of things it is easier to slip someone half a million in N5000 notes than in N1000 notes.
Even the use of 3 women to adorn the N5000 note is a masterstroke in irony in a patriarchal society where women are the most economically and educationally disadvantaged. How many women will ever touch a N5000 note and what would the money spent on this exercise do for our gender development indices if used judiciously?
And finally, there is the cost – N40 billion ($252 million) to effect these changes. Are the savings from changing the least used notes into coins, filling up ATMs less frequently and moving cash really worth $252 million dollars? If so, then Nigerians should ask for the numbers, it might help put things in perspective.
Despite our low literacy levels and dismal quality of education and regardless of the fact that many of us with multiple degrees have scant knowledge of history and even less about economics, monetary or fiscal policy – we know waste and profligacy in times of suffering and unemployment. Government policy has to be more than ‘we know what is best for you’ especially in the context of Nigeria where those in government are precisely the ones responsible for running the country into the ground. This decision by the Jonathan administration is just
one more sign to add to a long list of manifestations, that today, the people claiming to represent Nigerians are too far from the people they represent, they are incapable of hearing, listening and/or communicating with us and come 2015 and beyond, must not be allowed to claim to represent us anymore.