One characteristic of money is that, ‘it must be generally acceptable’. But that characteristic seems to apply differently here in Nigeria as coins are rejected by Nigerians for one reason or another; many have complained about its weight, others about its noisy nature. LEADERSHIP WEEKEND’S VICTORIA OZOHU MAYAKI and Gloria Ezeiru write on this issue.
Coins are gradually phasing out in the country and the question on the lips of many Nigerians is why? Are they so abhorred that Nigerians do not? see it as a medium of exchange? Many factors must be responsible for the near extinction of coins which were recently upgraded from 25kobo, 10 kobo, 5 kobo, 1 kobo to N1 and N2.
One of the factors attributed to why coins suffer irrelevance was due to its undue weight, even when the Central Bank of Nigeria had redesigned it to make it more attractive and acceptable. People fear they could keep losing it since it can easily slip from their pockets.
Even at that, how can Nigerians depend on notes for their day to day business transactions without coins to back up their purchasing power? In the market place generally, prices of goods and services are summed up in order to eliminate the chances of giving balance or ‘change’ as it is fondly called in the country simply because nobody wants to carry coins.
The ugly development, which economic watchers said is not helpful to the nation’s economy, is being blamed on lack of good enforcement measures on the part of the CBN.
It is rather unfortunate to state that Nigeria seems to be the only country in the world that does not use coins. Countries like Ghana, Kenya, Niger Republic, the United States United Kingdom and many others use coins in their day-to-day transaction.
But the CBN had explained that coins were introduced into the system to further ensure a balance in the nation’s currency structure and unit of accounts as well as ease transactions in the country.
As against the presumption that the CBN is not doing enough to enforce its use, the regulatory body said, in order to enforce the use of coins, it had earlier directed that all banks should pay two percent of all withdrawals in coins, but all efforts to achieve this feat were to no avail as Nigerians still don’t accept coins and in a situation where they did, they are deposited back into their accounts.
According to Mr. Ogechi Emeka, the operations manager of Keystone Bank, Wuse Market Branch, “Coins are still a legal tender in Nigeria, but people are not accepting it. We pay people in coins but they go back to deposit it. So what happens here is that we give coins and the people in turn return them. You can recall vividly that from the beginning of its introduction, it was rejected by Nigerians.
“Its rejection brought about the high cost of commodities. If coins are in circulation, things would be better, but because we don’t have coins in circulation prices of some commodities are approximated to the nearest denomination.
For example, something that would have normally gone for a naira or two would be approximated to five naira, because it is the lowest money in circulation hence, making commodities expensive. A lot of people don’t like having coins with them because of the awkward sound it makes in one’s pocket and the fact that it is a bit heavy.”
In the same vein, the director of currency, CBN, Charles Olurunde, maintained that the apex bank has not phased out coins, saying that it is still at the commercial banks.
He stated that coins are still legal tender, and are still used in the rural areas, attributing its rejection by Nigerians to attitudinal problem, as well as the purchasing power that is pushing them out due to inflation.
He said Nigerians are fond of not asking for their balance when they purchase items, and this attitude has also demonitised coins, which would have been a very good measure for ‘change’.
The director further pointed out that there are no machines that accept coins, machines that could accept coins to purchase goods and services since they are rejected in the market place and at malls, stating that a similar thing is happening abroad where people don’t want to carry coins.
“Over the years, since the public was not taking it, we thought of re-circulating it which we did by redesigning them. But as it is now, we have to do what is acceptable to the public. We have to do what the people want.
“We have to be proactive, we are sensitive to the needs of the people, by the time the cashless economy policy is fully implemented, the use of cards would cover all this.
“Nigerians are getting it all wrong, it is just an attitude problem, and the diversion from the use of coins is not only in Nigeria. What people must understand is that the currency of a country is your sovereignty.”
“The summing up of our pricing system is also a major problem. Coins are still a legal tender because you don’t see it in the urban area does not mean it is not in existence,” Olurunde said.
He further stated that despite all the efforts of CBN to enforce its usage which includes redesigning it, people still don’t accept them because, the purchasing power of coins are low, saying that the essence of price structure was to make sure that all the denominations are incorporated.
On the way forward in regards to making it acceptable to Nigerians, Mr. Emeka Ogechi said,?
“The Central Bank of Nigeria should reduce the circulation of notes and increase that of coins. Aside that, if they can turn them to notes, it will be a bit better, for example making one or two naira in note form but still have 50 or 70 Kobo coins which should be lighter but not? taking it out of circulation completely.”
For a country that wants to better its economy and improve the lives of its citizens, the use of coins must be incorporated in the system to provide a balanced price structure in the economy.
?