The Central Bank of Nigeria (CBN) recently commenced the direct circulation of lower denominations of currency with the view to ameliorate the plights of Nigerians especially traders and transporters from across the country. CBN’s Director of Currency Operations, Mrs. Priscilla Eleje disclosed at the Wuse market in Abuja that the apex bank planned to make the N100, N50, N20, N10 and N5 notes which are in higher demands across the country easily accessible to the end users, especially traders through their market associations and banks.
Apart from scarcity of lower denominations of the naira, the prevalence of mutilated and dirty naira notes also remain an open sore that the CBN should accord urgent attention. It would be recalled that scarcity of lower denominations of the naira has adversely affected trading, translating into myriads of challenges for stakeholders in the Nigerian local markets.
Therefore the intervention of the CBN, though belated, is a welcome development, as it would help restore sanity in the market and in particular reduce high inflation rate.
It needs to be emphasized that insensitivity of the CBN to the outcry by Nigerians was largely responsible for the persistent of the scarcity of lower denomination notes in spite of its detrimental effect on the national economy. The CBN ought to have prioritised regular communication with the Nigerian public long before now as part of its oversight functions in regulating the Nigerian economy.
It is however noteworthy that CBN has finally acceded to popular clamour for availability of lower naira denominations for ease of business transactions by end users at the local markets. It is hoped that the CBN will consolidate its engagement with Nigerians across the country to enhance useful feedback that will prevent the reoccurrence of the scenario that led to the prolonged scarcity.
It is an open secret that illicit trading in lower denomination of naira notes thrives in motor parks, venues of high society marriages and social events while scarcity hinders legitimate transactions. It is therefore important for the fiscal and monetary authorities to note that lower denominations of naira notes and coins are very germane for the general stability of the economy; particularly in an economy struggling with the bites of recession. Trading activities in Nigeria remains a predominant stabilizer of the informal sector to the extent that the scarcity of the lower denomination of naira notes contributed in fuelling inflationary trend in the economy as goods and services could only be transacted in higher currency notes that are in circulation.
Indeed, the non-issuance of coins in lower currency units has made transaction of goods and services such as fruits and biscuits in prices lower than N50 and N20 impossible in the open markets across the country. It is therefore important that the CBN re-examines the cancellation of coins considering the overriding negative effects on the economy. A situation whereby goods and services would be available less than N20 in the markets can only spell doom for the economy as undesirable inflationary challenges would become unavoidable.
It is also important that the CBN seizes the opportunity of its current intervention towards redressing the scarcity of lower denominations of naira to enlighten traders in the markets and the general public on the need for proper handling of naira notes. The prevalence of abuse of Nigeria’s currency leading to mutilation and dirtiness has reached the point of national embarrassment.
It is no longer enough for the CBN to condemn sale of Naira notes as well as its abuse at social gathering. It has become necessary to enforce relevant laws to check the malpractices and ensure that offenders are brought to book. It is instructive that mishandling of naira notes by Nigerians accounts for the huge volume of mutilated, dirty and stinking currency notes in circulation.
There is the need for sustained advocacy campaigns to sensitise Nigerians of the negative effects of manhandling of currency, which must be stopped in order to protect the life span of naira notes as well as maintain their quality. There is the need for the National Orientation Agency as well as relevant issue-based non-government organisations to embark on public enlightenment that will restore sanity to the image of Nigerian currency.
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