By CHARLES KUMOLU& AUGUSTINA ANYAEGBU
DESPITE being born and bred in Malumfashi, Katsina State, Iliyasu Danhassan is so much in love with Lagos that he professes this affection for the city to whoever cares to listen.
He is not bothered that the boisterous nature of the town is a sharp contrast to the tranquility obtainable in his agrarian community in the Northern part of Nigeria, where he had spent the first 24 years of his life.
So, the thought of going back to his homeland does not occur to him, since his petty trading flourishes unhindered.
He told Vanguard Features, VF, that but for the officers of the Lagos State Kick Against Indiscipline,KAI, a unit of the state Ministry of Environment, who usually arrest them for street trading and hawking, he had hardly encountered challenges that might make him consider quitting the business.
Recently, that job satisfaction seems to have evaporated into thin air. The father of four is now experiencing an all-time low sales following the scarcity of lower denominations of the Naira.
This development, he laments, has reduced his profit margin, leading to general drop in sales.
‘’This is so strange in Lagos. Though my brothers in the North also complain about it, but I am sure that what we have here is more frustrating. We started experiencing it two years ago but it became worse last year. We hardly get enough lower currency denomination to carry out our sales.
Absence of the lower , currency notes
This makes buyers to buy elsewhere. Some don’t even buy because of the absence of the lower currency notes,’’ he noted.
Still lamenting his plight, Danhassan said: ‘’I turn down buyers because what I get from them is N1000, N500 notes and I will not have the change to give them. This is frustrating.‘’
This Hausa trader who hawks his commodities in Festac Town is not the only one complaining about the scarcity of lower Naira notes. Checks by VF showed that the shortage is very common among bus conductors, petty traders, hawkers, and other informal businesses.
So agonising is the situation that traders and commuters are now forced to abandon their balance after purchase or exchange of services when the sellers could not raise the necessary balance to complete the transaction.
Why the scarcity: Though complaints about the inadequacy of the lower notes made the Central Bank of Nigeria, CBN, to come up with measures at addressing the matter in 2013, the problem has persisted.The apex bank had ordered its branches in the country to increase the supply of the bank notes to Deposit Money Banks, DMBs.
With the obvious failure of the intervention, Nigerians are asking what informed the scarcity and why it has defied solutions?
Controller of Ilorin branch of CBN, Mr. Monday Olotewo, attributed the dearth of the smaller notes to the withdrawal of bad Naira notes from the system by the CBN.
“We are very much aware of the problems being encountered by people on account of shortage of lower denominations of the Naira, and we have made a request for new notes at the head office in Abuja. We are optimistic that there will be balancing soon; injection of adequate lower denominations of the Naira. Some of the notes were badly handled by members of the public, thereby rendering it useless for transaction,” he noted.
Further investigations by VF corroborated the bank’s position. President Sadon Savings and Loans, Alhaji Abubakar Duchi, agreed that the non-replacement of the notes withdrawn by the CBN is responsible for the dearth of the lower notes.
Replacement of withdrawn lower notes: To him, what the bank did by removing bad Naira notes was in line with its statutory responsibilities, but he is angry that replacement has become a problem.
‘’I am not faulting the CBN for doing their job. What they did was right, but why have they not provided new notes to avoid what is happening now in the country. It is expected that the new notes will be injected into the system. That should be done because those in the informal sector are groaning, the elites may not experience it, but the man on the street is affected,” he told VF.
While some Nigerians attributed the development to the CBN’s cashless policy, others said the failed plan to introduce N5,000 note in 2012 is responsible.
‘’I doubt if the cashless policy is responsible; we have a situation where the CBN failed to print and inject new notes into the system. That is why we are here. The bank knows that we don’t have the prerequisite infrastructure for a full blown cashless policy, so I believe that has nothing to do with the shortage of Naira notes, ‘’ he added.
Chairman/ Chief Executive Officer Lambeth Trust and Investment, Mr. David Adoni, does not also see the cashless policy as responsible. But he does not know what informed the dearth.
He noted that had the CBN printed the polymer notes as it planned, the situation would not have been this obvious.
‘’The migration requires a lot of infrastructure which are regrettably not efficient in the country. There are regular instances of ATM machines not functioning. And ATM is so vital in the migration to a cashless economy. With that it becomes very clear that the transition should be gradual. There was a time the CBN talked about printing new notes to support the existing polymer notes. But I have not seen the new notes till now. Perhaps the velocity of the printing requirement is responsible for that, ‘’ he noted.
Need for coins
He, however, highlighted the implications of the scarcity on the economy thus: ‘’It has a negative impact on the efficiency of the country’s payment system. So if it is short in supply, it reduces the efficiency of the exchange system. It affects the functions of the exchange system. I don’t know why it has occurred, but if the monetary agency says that it is because of the migration to cashless economy, they must understand that it is a gradual process.’’
Asked the way out, he said: ‘’In this circumstance, coins are actually more ideal because of the durability and ability to withstand rough usage. Although I know that Nigerians find it difficult to accept coins. But if we must continue with cash economy , coins are needed because they are more efficient and effective.’’
Adoni is not alone in the call for reintroduction of coins as alternative means of transaction. The founder of Optimum Finance & Securities, Chief Bode Banwo, re-echoed the demands.
‘’When coins were in circulation in the glorious past, Nigerians did not go through what they experience now.
Non usage of coins
We are aware that the CBN is not culpable for the non-usage of coins because Nigerians for whatever reasons rejected them when they were recently introduced. But it behoves the CBN to ensure that people get use to using them,” he argued.
Continuing, he said: ‘’If developed countries could use coins, I still find it difficult to know why our people are rejecting it here. We still should not forget that currency reform of 1991 which phased out two kobo and five kobo coins contributed to the dearth of coins as a means of exchange in Nigeria. Coins are durable and are not affected by wear and tear like paper notes. So, the CBN should print the Naira notes they promised’’.
Traders react: At the popular Boundary market in Ajegunle, a trader, Mrs Inocentia Okoye summed up the problems they are encountering as a result of the dearth of lower Naira notes. ‘’Change has been a very difficult to come by. Customers always come with N1000 and N500 notes to purchase an item worth N50. I find it very difficult giving out the only change I have to such people because I don’t have enough. I don’t even look at those seeking for change when they come to me because I can’t give what I don’t have”.