Scarcity of lower naira notes cripples transactions

Though bus conductors are not the only ones affected by this problem, for them, the death of smaller naira notes is such a huge problem that it is now common practice for them to ‘join passengers together’ to look for ‘change’ between themselves, a situation that creates another problem and oftentimes prompts some commuters to […]

Though bus conductors are not the only ones affected by this problem, for them, the death of smaller naira notes is such a huge problem that it is now common practice for them to ‘join passengers together’ to look for ‘change’ between themselves, a situation that creates another problem and oftentimes prompts some commuters to rough-handle a number of conductors.
Dorcas Joseph, a conductor on one of the Abuja mass transit buses popularly referred to as ‘El Rufai,’ explains that it is in an effort to avoid conflict with passengers that bus conductors warn commuters in advance thus, “enter with your change.”
The story is the same with airtime vendors, sachet water hawkers or petty traders and taxi drivers. Even some shopping malls are not spared this problem. Lower naira denominations are in short supply, and this is posing a serious problem in different sectors of the economy. Traders say business is suffering and urge the Central Bank of Nigeria (CBN) to inject smaller denominations of the currency into the economy to ease transactions.
For Mrs. Aderinoye Mir, a foodstuff trader in Kubwa market, business has never been as bad as in recent times. “At least they should consider us, the petty traders, and print lower currencies in large numbers. Seriously, the ‘change’ issue is affecting my business badly,” Mir said ruefully.
“For example, this morning I have not used this hand to touch any money because most of the customers are bringing higher naira notes. If there are five customers, you will hardly see any of them with N50. Instead they come with N1000 and N500 notes which require change,” she adds helplessly.
It is a tale of the same woes for grocery seller Mrs. Nkiru Ojukwu, who laments that she had to turn down several customers because she had no ‘change’, a development which at the end of the day has an adverse effect on her profit.
“Some of the customers usually come with a N1000 note, expecting to buy goods worth N100. When you turn to your neighbour for change, you discover that she also has the same problem. Most of our perishable goods waste away simply because we turn down many buyers. Please the CBN should help us because this is crippling our businesses,” says an exasperated Ojukwu.
Apart from losing money to low patronage, some traders complained that they were even being short-changed by unscrupulous customers who take their wares with a promise to come back and pay when they have change, but end up not coming back to pay.
“Some of them will buy things promising to return the money when they have the change but you will not see most of them by the end of the day,” one trader who declined to give his name told Weekly Trust.
But it is not only traders and bus drivers who are losing money, Abuja residents like Bartholomew Egbo, are also groaning under the weight of the currency scarcity.
“I have lost quite a lot of money in the hands of ‘Okada’ men because they will tell me there is no change and I would have no option but to forfeit the money for them. This situation is telling on the poor masses because you will discover that when the currency is high, the worth of commodities become high as well. You can hardly see anything tangible to buy with N5 these days,” Egbo laments.
Economists say apart from slowing down business, especially in the informal sector, the shortage of lower naira denominations in the system has the potential of stoking inflation in the economy. As it is now, they say, the pricing unit in the national economy is much higher than it should ordinarily be. For instance, instead of prices increasing say by N5, N10 or N20, they usually climb by either N50 or N100.
But the CBN said recently that efforts were being made to address the problem. The apex bank’s director in-charge of banking supervision, Tokunbo Martins, said after a Bankers’ Committee meeting in April that the scarcity was caused by a truncation of the CBN’s currency restructuring exercise.
The top CBN official said that plans were underway to print lower naira denominations, adding that apart from flooding the economy with the notes, the bank would ensure that their quality was much higher than that of those already in circulation. But nearly one month after, Nigerians are still waiting for a respite.