Just In!!! - Senate wants lower Naira notes changed to coins

The Senate has urged the Central Bank of Nigeria to look at the possibility of converting the country’s lower currency notes into coins.

Senate made the call after a motion by Mustapha Bukar, the APC Senator representing Katsina South.

He had said: “The local retailers keep rejecting the coins because commercial banks won’t accept them as deposit, even when they are reflected on paper, and the CBN still recognizes them as legal tender.

“Since the three coin denominations of 50 kobo, one kobo and 10 kobo have lost their values due to inflation, the conversion of lower currency notes to coins will facilitate retail transactions in the economy, like we have in developed countries.

“Despite the huge budget by the CBN on sensitising Nigerians on the need to accept coins, the transaction chains were broken and banks and customers reject the currency, thus, promoting corruption and escalating inflation to the extent of diminishing the value of the coins.”

Citing examples, he said coins’ use in the United States remains important and that one cent had not phased out “due to inflationary ramifications of such a move”.

He also noted that that coins were in use United Kingdom, Japan, the European Union and the United Arab Emirates, but lamented Nigeria has now become the only country in West Africa “where there is a total absence of the coins in the economy.”

“In Nigeria, there are two types of retail payments; the highly repetitive small value transactions, such as urban transportation, sweets, cigarettes, kola nuts, sachet water, vegetable etc., as well as, less frequent but high value transactions like clothing, footwear, raw foodstuff, electronics etc.

“Coin currencies are designed globally to cater for highly repetitive transactions because of the nature and conditions under which they happen, such as crowded markets, bus stations, congested traffic, and varying weather conditions, including rainy, sunny and humid conditions in which notes are ill-suited for them”.

Following the motion, the Senate, led by Ike Ekweremadu, resolved to urge the CBN to intensify efforts to bring coins back to the economy and convert lower currency notes into coins to be used “side-by-side with the notes” to facilitate highly repetitive retail transactions in the country.

The Senate also urged the CBN to impose sanction on any commercial bank that rejects coins as deposit.