Nigerians bemoan fate of naira as mutilated notes take over economy

Happiness is a tricycle operator in Enugu. He charges his passengers according to their distance. Most operators of tricycle charge N50 per trip. However, “it is always a problem, especially, in the morning hours, to get passengers, who would pay you the exact fare,” he said.

Asked how he has been coping with the development, he stated that he either abandons the passenger with the N50 note or look for those he would drop on charter.

He told The Guardian that getting lower dominations of the naira is now a difficult thing, adding that in some cases, they pair passengers to enable them settle for a higher denomination before they are taken to their destinations.

He said: “Assuming I have passengers going to the Timber Market in Enugu, usually the fare is between N70 and N80 from the new layout end of the city. What I normally do is to ask those with N70 to come in, while also asking others who may not have N70 what denomination of the naira they have. If it is something I can sort out in the cause of the journey, I will carry all of them to their destinations, but if not, I go for those with lower denomination. It is safer, but inconveniencing.”

He said that on several occasions, he had to drop passengers and start moving from one shop or tricycle operator to another to ask for lower denomination to enable him settle a passenger gave him a higher denomination of the naira note.

For Uche Nwoye, a foodstuff dealer, getting the lower denomination, which he referred to as ‘change’ has always affected his business.

“Somebody will buy something and you need to balance the person N50, N20, N10 or even N100, but getting it is a problem. I have on several occasions given away reasonable amounts owing to lack of lower denominations. The business cannot move without it. You see yourself moving from one shop to another to ask your neighbours for assistance when you are supposed to concentrate on your business.

“That is the problem. I have tried to inquire, but nobody can say exactly what the problem is. To me, I have a feeling that the Federal Government wants to aggregate prices in such a way that, you can no longer buy items for as low as N100 or even N200. They want commodities exchanged from N500 and N1000. It is a problem for us my brother,” he said

In Rivers State, residents have continued to bemoan the ugly situation, expressing fear that the situation will shoot up the prices of goods and thereby increase the cost of living.

Michael Dibia, a resident of Ahoada, explained that the scarcity of smaller denominations have led to increase in the price of foodstuffs and transportation.

“I have observed of recent that you could barely buy spices used for cooking soup at N5 or even N10. I blame this on the non-availability of smaller denominations. Most traders prefer to sell them at N20 or N50 and above. Before a customer buys something in the market these days, the seller will ask whether the customer has the required money. Very often, the customers, like me, have to compromise to buy what I don’t intend to buy because of change. This is affecting the cost of living for people like us,” he said.

Similarly, Tonye Oruwari, who owns a grocery in Port Harcourt, stated that in the absence of small denomination currencies, the grocery shops have evolved a unique way to address the issue by offering chewing gums and sweets against balance, in place of the small denomination currencies.

“These day, people are compelled to purchase unnecessary additional items, so as to settle the problem.  It really hurts, but we have no choice. We have often encouraged people to use Point of Sale (POS) for transaction. To me, this has helped customers, and us who have adopted this medium of transaction to overcome the challenge. We hope that the authorities need to tackle this problem by making them available in order to ameliorate the plight of the people,” he said.

A former banker and financial consultant, Bolaji Ojudari, in Port Harcourt, explained that the reason why the lower denominations printed on polymer paper are scare is because they are printed outside the shores of Nigeria at a very huge cost.

According to him, the CBN obsession in higher denomination bills is to be blamed for the crisis the country currently faces.

Already, some persons in Port Harcourt, particularly at Garrison and Abali Park bus stops have capitalised on the situation to be selling the scarce lower denomination to traders and commercial bus and taxi drivers.

Also in Kwara State, while some traders complained of the scarcity, agreed that it had assisted in swelling their profit margin.

Alhaja Afusat Wakilu popularly called ‘Iya Azeez’ at Lanjoorin Street, Murtala Mohammed Way, Ilorin, said many of her customers often forfeit their balances with her without realising the magnitude of gains conceded to her.

“For instance, if you buy a sachet of water that used to be N10, few months ago, some customers would insist on getting their N10 balance while many others would not even wait for it. The implications of this is that such buyers without them knowing has added over 100 per cent gains to my profits margin,” she said.

A visit to Olusola Saraki’s modern abattoir Sobi Road, Ilorin, showed that only 40 per cent of the meat sellers handle currencies with care. Others merely collect the notes and squeezed into their locally made purses, not minding their blood stained hands.

A commercial bank personnel who pleaded anonymity, blamed the nation’s Apex Bank, Central Bank of Nigeria (CBN) for its seeming lethargic attitude towards replacing the damaged notes with new ones.

Besides, he said the cost of producing paper notes was more compared to the cost of producing polymer notes, just as he believed that the CBN would often count as wasteful the costs of production of the new lower denominations, “especially during this great and excruciating economic doldrums.”

In Plateau State, an operator of a restaurant in Jos, Mrs. Sarah Egwu, whose business name is Rejoice Restaurant, said the situation is terrible, bad and disgraceful to the country, as the tattered Naira notes have taken over the currency market.

According to Egwu, the Central Bank of Nigeria (CBN) should print new lower denomination notes of the Naira and burn those mutilated lower denominations.

She said: “If somebody buys something and wants to collect his or her balance, the person will refuse to collect the mutilated notes. They will return the bad notes to you. They (customers) will even reject the notes with quarrels on why they should be given bad notes. I too will not want to collect bad notes from, because I know that if I collect, no other customer will collect them from me. That is how I have been managing the situation.”

Whatever the Central Bank of Nigeria (CBN) or the authorities responsible for the prevailing shortage of naira and its denominations had in mind in doing so, the negative impact on the economy has outweighed its positives. This is the verdict of the cross section of Abia residents, who said the development has disorganised business, sparked quarrels among buyers and sellers of goods and services.

In the past, when a mutilated currency note came into ones’ possession, it would be taken to the banks for exchange for cleaner ones over the counter. Thereafter, the exchanging bank would take the same to the apex CBN for necessary reconciliation.

A man told The Guardian that he once went to Umuahia CBN to change mutilated notes, but the challenges he faced made him forego the idea.

There was an incident that happened at a commercial bank in Umuahia. A lady came to deposit N50, 000 notes into her savings account. The receiving cashier identified a mutilated note and asked her to change it or she will receive the deposit less the mutilated N500.

Refusal of the cashier to accept the note led to a protest by customers. The scene held banking transactions that day for a long time until a customer who could no longer endure the long waiting, exchanged the mutilated note for the potential depositor.

Also, in Imo State, traders, intra and inter city transporters, buyers of goods, commuters among others have been affected by the shortage, tattered and dirty money in circulation.

For John Okafor, an Owerri intra-city based taxi driver, the problem of looking for change for passengers delay his movement and inflow of cash. He said he is often forced to look for N50 and N100 for his passengers.

Meanwhile, a Lagos-based top financial expert, Julius Adekeye, told The Guardian that the acute shortage of small naira denominations is as a result of inflationary pressure on the economy, which has eroded the value of the naira.

Going further, he said, “N5 and N10 can hardly buy any item in the market today, hence why would you want to hold a N5 note only to combine four of it to buy an item worth just N20, when a single note of N20 is easier to carry about and faster for such payment? This argument is valid for other lower naira denominations below N500 note. The price of goods and commodities are rising astronomically daily, weakening the Naira even more.

“Due to the erosion in the value of these lower naira denominations, the high cost of printing such notes, which will be required in large quantity for fewer transactions, as you will need to combine five N200 notes or ten N100 notes to pay a bill of N1000, is also discouraging the CBN from printing these Naira denominations.”

On the dirty and tattered notes in circulation, he revealed that this is due to three main factors. First, the scarcity of said notes lead to high velocity of circulation of the few existing ones, that is, the rate at which the notes move from one hand to another in exchange for transactions daily, causing it to wear and tear quicker.

“Also, the introduction of charges on the commercial banks by the CBN for mutilated notes is also discouraging the commercial banks from withdrawing such notes from circulation, and finally and more telling, is the cash based nature of our economy with, until recently, virtually all transactions being done in cash.”

A Lagos commercial bus driver, Mr. Sulemain Waheed, said most passengers are fond of giving his conductor dirty and mutilated currency notes, most especially N100 and N200, which he grudgingly accepts, with the aim of spending them at the filling stations, however, “the filling stations too normally reject the money.”

Mrs Ibukun Okoye, a trader summed up the problems, saying, ‘change’ has become very difficult to come by. “Customers always come with N1000 and N500 notes to purchase item worth N50. I find it very difficult giving out the only smaller denominations I have to such people, because I don’t have enough. I don’t even look at those who are in dire need of smaller notes because I can’t give what I don’t have”.

Mr. Wale Shogunle, a bus conductor said: “Sometimes, I don’t carry passengers who don’t have exact money to get to their destinations because I can’t afford to start looking for balance for the passengers. Most passengers that normally enter my vehicles, at times comes with big notes like N500, N1000 to pay for a fare of N50, so I prefer to carry the passengers that has change,” he said.

According to a Tricycle Operator, Mr. Shogunle Olatunde, “we hardly get smaller currency notes to give to customers these days, as balance because the smaller currency are scare.”

According to a trader at Boundary Market, Ajegunle, Olodi Apapa, the absence of lower denominations like N10, N20, N50 and N100 makes buyers to go elsewhere. “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.”

Narrating their ordeals over the dearth of smaller naira denominations, Ahmad Goni, a bike rider in Ejigbo, described the situation as provoking, saying it affects day-to-day business activities.

“This situation makes me lose most of my potential customers. My business has suffered greatly due to this problem. Most times, I ignore customer who do not have change, because nobody is ready to change the money to lower denomination for me,” he said.

“The most worrisome time for me is early in the morning when I just come out to start my daily business. Some passengers will pay N1000 note for a fare that is just N50 and that may be the first person for the day. You don’t have any choice than to leave the money because nobody is ready to help you with lower denomination.”

A bus driver, Seun, said transporters suffer most. “The situation is so pathetic; imagine out of 21 passengers that board your bus, not less than 15 will pay you with either N500 or N1000 note for a fare charge of N50. Where do they want me to get the balance? What I do most time is to join them together (bus marriage).”

A bus conductor plying Oshodi to Mile 2 said this problem has become overwhelming and if you are not careful, “you will lose your daily earnings in the process. No matter how you shout or tell passengers to enter with their correct fare, some will still pay you with high denominations like N1000 naira note and you will end up buying things you don’t need like table or sachet water, Gala at your own expense.”

A commuter, Mrs Adebola Oladele, said: “Nobody is to be blame over the scarcity of lower denomination notes. I can’t imagine having lower denomination notes with me and paying fare with higher denomination note, but some time you just find yourself in that shoe. Most times, if I don’t have the lower notes, I tell the conductor before entering the bus. If he refuses, I will wait for the bus that has the exact balance to give, because the way the conductors treat passengers with high denomination note is appalling.”

Also speaking, Fowojola Adesimi a (danfo) bus conductor, who plies Iyana Ipaja and Oshodi, revealed that because of the rate of bad denomination of smaller notes and its rejections by passengers, he goes to bureau de change to buy new currencies and give to passengers who bluntly refuse the bad ones in circulation for balance.

“Two weeks ago, a passenger tore my shirt because I gave her a mutilated hundred naira note and didn’t have a better one. She insisted the N200 note she gave me was neat and would not take the bad note, compelling me to get a better N100 note for her.

“I didn’t have a better one, so, I forced the money into her hands, she then grabbed me and tore my shirt and practically assaulted me. I then decided that I would be buying new currencies worth N2, 000 daily to avoid reoccurrence of such incidence.

“However, I only issue the new notes to passengers who insist, while I issue the bad ones to those who understand it is not my fault,” he said.

Amaechi Okpala, a (molue) luxurious bus conductor popularly know as ‘Eba Ibo’ said because of the shortage of smaller denomination, he always insisted that passengers get on board with the exact fare to avoid the problem of sourcing for their balance.

“Though most times passengers don’t adhere to my warnings, but it gives me the leverage of joining them. It is not easy, though, as I get forced sometimes to buy things I don’t need just to balance my passengers,” he said.

Similarly, a staff of United Bank for Africa (UBA), who pleaded anonymity, told The Guardian that the reason we are having this issue is because we do not have a responsive and responsible government.

“Our money is supposed to be our brand and a responsible government should endeavour to protect its brand. But that is not the case. Few years back, there was an issue that went viral, about the people who were supposed to destroy mutilated and defaced currency, instead, they replaced the monies with paper and continued to re-circulate the condemned monies until they were caught.

“The people who sell money at occasions is also a pointer to the fact that our government is not responsive to issues. How can a legal tender be used for transactions that are not legally bound and nothing is been done about it? Those garages are not legally recognised to carry out financial transactions, but they carry out their activities unchecked.”

He added that getting the smaller denominations is a huge issue as even the Central Bank of Nigeria (CBN) keeps telling the commercial banks that the denominations being sought after are not available.

“There is need for transparency and truthfulness on the part of the CBN and the commercial banks on how currencies are circulated.

“As to why ATM’s don’t dispense smaller denominations, it is because these machines are manufacturer/buyer specified. They have been built to dispense only a certain quantity of notes and the buyers which are the banks, go for the ones that will meet the need of customers. Most customers prefer #500 and #1000 denominations to other denominations.”

While it may seem that the government is not aware of this issue, a staff of Guaranty Trust Bank (GTB) said that the CBN, by their internal policies and procedures, are mandated to periodically destroy defaced and mutilated naira notes.

“The CBN by design, should continue to issue good notes and destroy the bad ones, but because of certain reasons which I think one of it is the cost of production, they are not doing that as often as required. But whatever the case, the fact still remains that the CBN has failed in her mandate. No excuse is justifiable enough”.

A food seller, Adaku Nwachukwu, told The Guardian that she has been to the bank on several occasion to ask for smaller denominations like N50, N100 and N200, but she is always told that they are unavailable.

“I am owing so many customers their balance. Some come back to ask for it. Some use it to buy something, while some eventually forget that I owe them. I am a human being and so I don’t get to remember everyone I owe. This is very bad for business”.

In Akure, Ondo state capital, exasperated, Madam Becky, as popularly called by commercial drivers in one of the popular motor parks, stood akimbo, she looked leeringly at a bus conductor who called out to buy a sachet of water in her stall.

“Kowope,” she responded to the customer, “I don’t have change o; if you know you are coming to buy pure water here and you don’t have N10, please go elsewhere and get it. It is too early in the morning, don’t bring bad luck to my sales today.”

This has been the experience of many petty traders across the state, who have been complaining bitterly about the acute dearth of small currency and naira denominations that is grinding the economy of the state.

Madam Becky said the problem has been threatening her sales for the past two years.

“It is just as if all the small naira notes like N5, N10, N20, N50, N100 and N200 have been packed out of market. They are just very hard to get these days; most of our customers come to buy things here with big money.

“The kind of big money we see very often now is N500 and N1000 notes. Most of these monies are aganran (crispy new notes) when they bring them to buy goods from me and I begin they wonder if government is not producing the smaller notes again.”

She explained the herculean task people selling in the neighbourhood go through to get change, revealing that they sometimes keep calling at several shops in the quest to get change for their customers.

“And the most frustrating thing is that some people will come here to buy N10 something and they will being N500, and even N1000. So, where do they expect us to get change for them. It can be so annoying at times,” she said.

A fan milk retailer on bicycle, Mr. Onyeabuchi Chukwu Joseph, recounted his experience on getting lower currencies in exchange for the balance of some of the products bought by his customers.

According to him, most times, he tries to get a lot of lower naira denominations before leaving home for each day’s sales on his bicycle, “but there are times when the money get finished very quickly.

But the Manager of United Bank of Africa (UBA), Okitipupa Branch, Mr. Adesola Orisamoluwa, attributed the scarcity to the attitude of the people towards lower naira notes and extreme dependence on foreign exchange.

“Basically, it is driven by lower supply to the commercial banks, we don’t always have so much of them. I want to believe the major reason that is happening is because the lower denominations are not really of high purchasing value these days.

“If you look at some cheapest commodities, they start from N50, when you are holding N10 and N20, you have to pack so many of them to buy goods,” he said. “Even the quality of our mints too is not helping matters, N1000 can go into circulation as many times as possible, but N10, N20, N5, the quality is much lower. By the time they go into circulation, they actually got worn out and ready for withdrawal back to the Central Bank of Nigeria.”