2017-06-02 Fri

The Central Bank of Nigeria has been asked by the Senate to reintroduce coins to cater to highly repetitive transactions. Banks and traders are rejecting this idea though. 11 currency denominations including 8 banknotes and three coins are legal tender in the country. It was suggested that since three coins were withdrawn from circulation due to inflation, the lower denomination notes like N20, N10 and N5 bank notes should be made in coins for daily transactions.

It was proposed that coins are better for low value and repetitive transactions as they generally happen in crowded market places, bus stops and bad weather conditions. It was also recommended that the country should start returning coins as soon as possible.

The general public has to visit ATMs very frequently. Banks are also running out quickly of small denomination banknotes. Apart from that, the Central Bank is thinking of producing currency notes depending upon the demand to cut minting costs. Hybrid plastic notes were introduced to combat wear and tear of currency notes. The cost of printing an N5 banknote is N20. They are printed in foreign countries, affecting the foreign exchange earnings. Dependence on currency notes has hence slowly become unsustainable.

It was also reported that 30% of bank notes in the country are fake. It has been proposed that the naira should be re-denominated into the regular transaction cycle. The Senate also said that the Central Bank should take care of the concerns of the general public and not that of banks and a few traders.