By Aminu Imam
While Nigerians have been told that their quest for lower value naira notes may soon come to fruition by the Central Bank of Nigeria (CBN), many Nigerians, particularly traders and commercial vehicle owners and commuters are crying out to the concerned authorities over the persisting lack of lower currency denominations in the Nigerian financial system.
Since about 85 percent of the nation’s daily transactions are conducted in cash, it is becoming a daily hassle for most ordinary Nigerians to access lower currency denominations, so much so that the issue of one getting ‘ordinary change’ in lower denomination of Naira notes has become a daily nightmare for most Nigerians.
The shortage of the denominations in circulation has become very noticeable among retailers, bus conductors and petty traders. Many traders and commuters have been forced to abandon their cash balances after purchase or exchange of services due to the fact that concerned sellers and/or bus conductors could not raise the necessary balance to complete transaction.
……. investigations however revealed that such shortage is not experienced among “currency hawkers,” who line the streets of Dei-Dei in Abuja, Federal Capital Territory (FCT) and Lagos on Fridays and Saturdays, selling crisp notes, particularly in lower denominations.
Some Nigerians have attributed the development to the CBN cash-lite policy while others said the failed planned introduction of N5, 000 note in 2012 may be responsible.
It has become almost a crime now in Nigeria to walk into a restaurant or local buka, or board a commercial vehicle and not hold your own change. After buying stuff and trying to pay, the first thing you hear is something like, “Hold your change o!”, prompting some observers to wonder when did it become a customer’s duty to hold his or her change? And since when did Nigerians have to pay the price for not having that said change?
Most businesses only require lower currency denominations for petty-cash purposes which are not frequently a significant amount. For retailers and others dealing directly with the public, there is often the need to pay in substantial amounts of cash in different denominations of notes.
A fried yam seller at Utako market, who spoke to our correspondent, but preferred anonymity, described the problem of change in her business as ‘seriously’ affecting her business. “Actually, we get serious problem with small changes with customers like if somebody comes with N1, 000 or N500, because some people will not even buy if you don’t have change. They will ask you first”.
However, despite the agreeing with the problems associated with larger denominations, the yam seller doesn’t believe that the attempt by the CBN to introduce N5, 000 notes some years ago would have solved the problem. She said, “I think the problem will even get worse if CBN brings out new N5, 000 notes. Even now, we encounter problems of changing N1, 000 or N5, 00 notes, so if it’s N5, 000 it will be worse.”
A conductor with one of the Mass Transit Buses, popularly known as “subsidy bus” in the FCT, who could barely speak because of emotion opined that they used to tell passengers to hold their change before they enter such buses, because of the challenges they face.
He stated that they waste a lot of time looking for change, especially when a passenger is dropping before they reach their bus stops, which according to him affects their bottom line.“We dey tell passengers to hold change for hand before they enter. Na because of the problem we get; na im be the reason we dey tell passengers. We fit stay long on the way before we get change. The problem e no be small o!” he lamented.
When pressed to talk about his opinion if CBN introduces coins this year, the conductor frowned his face, and answered thus: “For this kind our work, if you come bring coins, we no fit collect am, I tell you, bros; For where we go keep am?” he angrily queried.
Also, a mechanic along Jabi road in Abuja, FCT, Hassan Musa, said that he often encounter problems with the issue of change. He cited the nature of his business and the fact that he, most times, deals with commercial transport.
On lower denominations coins, he claimed “most people will not be going round with coins in their pockets, so you see they won’t last before they would disappear”.
According to a bus driver in Jabi, in Abuja, Felix Emmanuel, “Sometimes, we find it difficult to give our passengers change and it affects our business”. Could you believe a passenger will give you N1,000 from Area 1 to Berger, how can you manage to find a change? Especially when you just came out in the morning; to me, I find it difficult to leave change for any passenger because the gain is not much.
However, when carrying out a transaction, one often times find it difficult to buy some items in the market as sellers refuse to accept higher denominations because of change. This will surely affect the seller, who is likely to take longer time before selling his goods and it would also affect the buyer if he/she is pressed to buy the goods, leaving his change behind. It will also affect the economy, putting more hardship to the poor.
Indeed, people are suffering to battle with another Herculean problem of lack of lower currency in their daily search of livelihood. Whenever you go to the market with huge amount to buy foodstuff of N500, where do you expect the trader to find change? It’s either you as the buyer forfeit your change or the seller does, which will surely affect your budget as the buyer and in turn affect the seller, because he might not meet up with his/her profit at the end.
Cash is still the king of transaction in the country, even in Lagos state,and therefore the availability of lower denominations is a task for the CBN The amount of the huge loss to the country arising from aborted transactions due lack of appropriate ‘change’ can best be imagined. Even now, the Automated Teller Machines (ATMs) dotting the country’s landscape for now dispense minimum of N500 currency note.
Most people, especially the affluent of the society, may see this as a small issue as they are wont to leave their change rather than face the hassle of, “No change o.” But for the rest of most Nigerians, who are left to bear the brunt of endless frustrations, and sometimes degenerating into quarrels and even exchanging blows.
Also highlighting their challenge, a trader in Wuse market Abuja, Miss Funke Adeyemi, told our correspondent that the scarcity of lower denominations in circulation is a major issue between bus conductors and commuters.
“We have to contend with abuse and curses from passengers who are not able to get their balances after our service. In most cases, we have to forgo our own fair for peace to reign and often we do advise passengers to board with their ‘change’ to avoid any quarrel,” he said.
The erstwhile CBN’s Director of Communications, Ugo Okoroafor, while explaining the situation, acknowledged the shortage of the lower denominations in the system but said the situation has improved.
Beside their non-availability, six years after their introduction by the CBN, the public has almost lost interest in monetary transactions involving the exchange of N5, N10, N20, and N50 polymer notes.
An economist, Mr. Tunde Egbinola, said the currency reform carried out in 1991 in which 2 kobo and 5 kobo coins were phased out and 1 kobo, 10 kobo and 25 kobo coins were redesigned, should not have been reversed.
He observes that the subsequent coinage of 50k and N1 notes when the N50 note was put into circulation could somewhat be cited as the cause of sudden disappearance of coins in some business transactions.
According to him, while other developed and developing countries make use of coins for daily financial transactions, it is unfortunate that the coins, comprising 50 kobo, N1 and N2, have failed in that regard.
Okoroafor notes that the apex bank could have replaced the polymer notes with coins but the Federal Government had stopped currency restructuring.
The irony in the Nigeria’s informal sector is that while the lower denominations are exiting the currency circulation system, the higher denominations such as N100, N200, N500 and N1,000 are prevalent.
As it stands, it is a major concern for the retail end of the economy because their activities can only be sustained by adequate supply of lower denominations.
According to Mrs. Suwaiba Sani, a petty trader, “If CBN fails to do anything to address to shortage in supply of these currencies, we will wake up one day to find that N5, N10, N20 and N50 have been rested and we will be forced to buy a product of N10 for N100.”
It has therefore become imperative that the CBN should come to the rescue of the common man so that the unbearable and unnecessary hassle can be reduced to the barest minimum.
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Aminu Imam
+234-803-364-4990