Sanusi Lamido Sanusi’s Unwanted 5000 Naira Notes

By Farooq A. Kperogi , Ph.D. You don’t have to be an economist to know that Central Bank of Nigeria governor Sanusi Lamido San...

By Farooq A. Kperogi, Ph.D.

You don’t have to be an economist to know that Central Bank of Nigeria governor Sanusi Lamido Sanusi’s decision to convert some naira notes into coins and to introduce a 5,000 naira note is both unwise and out of touch.

As many people have already persuasively argued, there is neither economic sense nor common sense in Sanusi’s plan to unleash his unneeded N5, 000 notes on us. The only thing I can point to as the motive force for the policy is that it helps corrupt politicians and their cronies in the private sector to physically steal and move about with large sums of money without being noticed.  Hundreds of millions, even billions, of naira can easily be packed into bags without attracting curious stares from poor, starving people.

For the minimum-wage-earning cleaner at the Federal Secretariat—and elsewhere in the country—higher naira notes do no more than deflate his already tattered ego. His N18, 000 monthly pay would now be reduced to two worthless 5,000 notes plus 8 pieces of one thousand naira notes. 

So higher denominations only serve the physical and psychological needs of the super-rich. Maybe that’s a cheap emotional argument to make, although I do think that our emotions are an important part of our humanity.

But what I simply can’t wrap my head around is the logic behind Sanusi’s plan to convert 5, 10, and 20 naira notes into coins. Historically, in Nigeria, once a naira note has been converted to a coin, its notional value automatically depreciates. You don’t need any training in economics to know this. All you need is a self-training in common sense. 

If Sanusi’s plan succeeds, I can bet my bottom dollar that sweets and biscuits and bubble gum and other traditionally low-priced stuff would cost N50 instead of N5. The cost of the lowest-priced items in Nigeria’s informal economy is often pegged to the lowest denominated note. That means the conversion of 5, 10, and 20 naira notes will create artificial inflation in the national economy.

Nigerians famously hate coins and avoid them like a plague—and for good reasons. Coins are notoriously cumbersome to carry; their annoying sounds draw needless attention to you. Most importantly, the structure and operation of the Nigerian economy don’t encourage the use of coins. In America, for instance, people have countless uses for coins: Coins are used to buy soft drinks and bottled water from vending machines. Coins are used to get trolleys or carts at airports. Coins are used to pay car parking fees. Coins are used to wash clothes in coin laundries. And so on and so forth. Tell me: what use have coins in Nigeria other than being irritating burdens? 

So the resentment that ordinary, struggling Nigerians feel toward coins isn’t entirely pointless. It has basis in the reality of our everyday existence, which out-of-touch bureaucrats like Sanusis are clueless about. 

Sadly, Sanusi is now fast assuming notoriety as one of the most insensitive, out-of-touch bureaucrats to ever walk Nigeria’s corridors of power. For instance, early this year, in the course of an Internet spat with a Nigerian activist during the “fuel subsidy” protests,  Sanusi protested that it is diesel, not petrol, that powers generators and that Nigerians should stop whining about how the increase in the pump price of petrol would deprive them of electricity. 

This was what I wrote on my Facebook page at the time: “How many people's generators are diesel-powered here? The last time I was in Nigeria, I used petrol to power mine. I didn't get the memo that generators now use diesel. How more out-of-touch can a man get?”

When Sanusi’s attention was brought to the fact that only “subsidized” and privileged “big men” like him use diesel-powered generators, he backed down and apologized. But I found it remarkably telling that until early this year, Sanusi had no freaking clue that the majority of Nigerians use petrol-powered generators to get electricity for themselves. Yet it is people like this who make policies that affect the lives of the vast majority of our people who are desperately poor. Why won’t there be a vast disconnect between policies and people when the people who make the policies live in a vastly different world from the rest of us?

And this man whines like a spoiled brat when people call attention to his sheltered, feudal upbringing. Well, it is because his upbringing has a direct, deleterious bearing on the kinds of thoughtless, insensitive, and anti-poor policies he regularly supports or churns out since he became Central Bank governor.

Sanusi’s case is particularly sad because he had deceived a whole lot of us into thinking that he was “one of us,” into thinking that he had committed “class suicide.” He deployed his admirable analytical and oratorical skills to lull us into an undeserved sense of ease with him. But it’s now obvious that he is one sneaky, conniving petit-bourgeois opportunist who masqueraded for long as a defender of the poor. Now his mask is off.

Like in the unjustified fuel price increase that he and a gang of other conscienceless Jonathan administration thugs rammed down our throats, Sanusi may yet succeed in inflicting strains on the everyday Nigerian through his misguided monetary policy, but he should be reminded that when people are pushed to their elastic limit, they will react. The “Occupy Nigeria” protests bear an eloquent testimony to that fact.

The Jonathan we now know

Reuben Abati’s piece titled “The Jonathan they don’tknow” is a classic specimen of how NOT to do PR. If President Jonathan approved of the piece before it was released to the public, then our president is even more clueless than people think he is. If he didn’t, well, he knows what to do.

The number one rule in PR intervention is that you don’t give currency to injurious rumors about you or your principal by repeating them. That is precisely what Abati did in the piece. After reading Abati’s piece, I came away with the distinct impression that President Jonathan is indeed—as many people had said in hushed tones—an indolent, provincial, clueless, gluttonous, kain-kain-guzzling man. 

If he is not anywhere close to this description, the presidential spokesman wouldn’t have bothered to respond to them.  As the late British journalist Claud Cockburn memorably said, “Never believe anything until it’s officially denied.”