The Central Bank of Nigeria should convert the country’s lower currency notes into coins to facilitate “highly repetitive” retail transactions, the Senate said Tuesday.
The advice came after a Senator spoke on the implications of rejection of the existing coin denominations for the economy.
“The local retailers keep rejecting the coins because commercial banks won’t accept them as deposit, even when they are reflected on paper, and the CBN still recognizes them as legal tender,” said Mustapha Bukar, the APC Senator representing Katsina South.
Given the rejection, plus the loss of value of the coins due to inflation, Mr. Bukar, therefore, suggested conversion of the the lower notes into coins to “cater for highly repetitive transactions” which “overwhelming majority” of Nigerians are engaged in due to “location and income”.
“Since the three coin denominations of 50 kobo, one kobo and 10 kobo have lost their values due to inflation, the conversion of lower currency notes to coins will facilitate retail transactions in the economy, like we have in developed countries,” the senator said.
“Despite the huge budget by the CBN on sensitising Nigerians on the need to accept coins, the transaction chains were broken and banks and customers reject the currency, thus, promoting corruption and escalating inflation to the extent of diminishing the value of the coins.”
Quoting unnamed “experts”, he said coin denominations were important in helping control devaluation of country’s currency. Taking an instance from the U.S.A, he said a reason why one cent had not phased out “is due to inflationary ramifications of such a move”.
He observed that coins were still being used in advanced countries, including the United Kingdom, Japan, the European Union and the United Arab Emirates, but lamented Nigeria has now become the only country in West Africa “where there is a total absence of the coins in the economy.”
“In Nigeria, there are two types of retail payments; the highly repetitive small value transactions, such as urban transportation, sweets, cigarettes, kola nuts, sachet water, vegetable etc., as well as, less frequent but high value transactions like clothing, footwear, raw foodstuff, electronics etc.
“Coin currencies are designed globally to cater for highly repetitive transactions because of the nature and conditions under which they happen, such as crowded markets, bus stations, congested traffic, and varying weather conditions, including rainy, sunny and humid conditions in which notes are ill-suited for them.
“Countries regularly upgrade their coinage to keep pace with the prices of this category of retail items,” Mr. Bukar explained.
Following the motion, the Senate, led by Ike Ekweremadu, resolved to urge the CBN to intensify efforts to bring coins back to the economy; and convert lower currency notes into coins to be used “side-by-side with the notes” to facilitate highly repetitive retail transactions in the country.
The Senate also urged the CBN to impose sanction on any commercial bank that rejects coins as deposit.
Nigeria’s current currency notes are: N5, N10, N20, N50, N100, N200, N500 and N1000.
Mr. Bukar did not mention exactly which ones he defined as “lower notes”.
... How can this help the economy? All Nigerians now are experts in monetary and fiscal policy. Will that make $1 equal to N1 naira?
ReplyDeleteThat opinion of changing naira note to coins will not help masses because only them will be using it, for you who brought the matter will just be seeing it in TV and RADIO stations
ReplyDeleteThat opinion of changing naira note to coins will not help masses because only them will be using it, for you who brought the matter will just be seeing it in TV and RADIO stations
ReplyDeleteWhat has changing of lower naira to coins got with the promised 'change' to us. Or is this the kind of change they meant during their campaign era.
ReplyDeleteThe man Buka must go to the market with the lower notes and try to buy the items he mentioned above and see if there is vegetable of N5 or N10. This same argument was proposed when N1 and 50k were changed to coins and N2 coins were introduced to the market. Today where are these coins? They only appear in Primary school Mathematics textbooks nation wide. Even N5 is hardly used. It cannot buy orange, grocers prefer to sell sweets at 3 for N20!
ReplyDeleteOga Buka, leave that side alone, research and focus on how start mass production of items/needs and also improve the standards of these items. An item sold for 1cent in the US or 1 pence in UK worth how much of naira in today's economy. Oga Buka, please tell us what you can buy in Abuja with N5, Or What did you buy in the last 1 year that you were given a change or balance of N5?
It is the market that will determine whether 1K, 5k, N1 etc will be needed/useful in the country. When I was in secondary school in 1983/84, A sizable loaf of bread, a bottle of mineral/soft drink and today's size of N50 groundnut all together cost only 50K. Tell me who will now go to a petty trader with N5 to buy these items not to talk of just buying one out out of the list. If you do, as a child/school boy, people will suspect you. Then, N20 was the highest denomination of naira and with a N20 naira note, you can buy a bag of rice, a 5ltr tin of vegetable oil (Kings/turkey brands) transport them home, buy kerosene and stew ingredients to cook rice for your family.
these pple are under the influence of something. these sets of pple can not do anything to help this country.
ReplyDeleteThey are just confused..know nothing more to do and help the country.
ReplyDelete