Small business owners are getting worried at the continued disappearance of lower denominations of the naira from circulation. This development, which many believe has the potential of exacerbating the already spiralling inflationary trend, may have started to rear its ugly head with the phasing out of coins and the introduction of higher denominations. The monetary authorities decided to convert the coins to paper money because, according to them, it was more cost-effective.
Before now, some items of trade bore the price tag of those denominations that are now being threatened with extinction. It was customary for supermarkets to deliberately ensure that their customers got their change in those denominations. Even parents used to take delight in giving their wards small money for biscuits and sweets. Today, most children would consider their parents stingy if they as much as give them N50 when they are seeing them off to school. Yet, it is not as if the economic circumstances of those parents improved in any significant way to warrant such feelings.
This situation has generated its own social and economic implications. It is not uncommon to observe street fights because someone did not pay the accurate price for a particular service or that one complained that the correct change was not given. Many have had to pay more for goods and services than they should have. To this extent, prices have had to be fixed to eliminate the chances of using these denominations in certain transactions. Bus drivers and conductors are familiar with this problem.
Nigerians have raised the alarm and appealed to the Central Bank of Nigeria (CBN) to remedy the situation. The CBN, in its reaction, insisted that it supplies enough of these denominations to the deposit money banks (DMBs) even as it has directed all its branches to interface directly with members of the public, including shop owners, to enhance easy circulation of the currency. The nation’s apex bank expressed concern over the unwholesome act of hawking the naira or dispensing it in parties, explaining this as a possible reason for the short supply and not that it was a deliberate policy to phase them out.
We share CBN’s apprehension in this regard and point out that these hawkers get their supplies from somewhere either in the CBN itself or the DMBs. The CBN claims it is investigating this act to determine if any of its staff members is involved in what it rightly described as a criminal act.
Any staff of a bank caught in this nefarious act must be punished as an economic saboteur. Much as the apex bank tries to disabuse the public’s minds in what it said were “misrepresentations and speculations” regarding its role and mandate in the issuance and management of the national legal tender, we believe that these denominations play their roles in the economy and must be allowed to continue to do so.