Currency notes issued by the Central Bank of Nigeria,
CBN, in the denominations of N200, N100, N50,
N20, N10 and N5 are currently not readily available on
demand in banks in the Lagos area. Even the currency
notes in denominations of N500 and N1000 given out
by the banks are not clean and do not have a few new
notes in the packs as has been the practice in the past.
When one enters a banking hall and asks for currency
notes in denominations of N200, N100 or N50, the
usual answer is that the bank has not seen such notes
from the CBN recently. One bank advises that one
should come on a Monday because that is when the
bank receives deposits having currency notes of
denominations of N200, N100 and N50 from
churches. In one instance, a bank was rationing N200
currency notes in lots of 5 per person. At another bank,
I was able to obtain ten units of N200 currency notes
which I subsequently had to share with two other persons
who needed change for their customers. I recall that on
the last occasion that I obtained N100 currency notes
from a bank, I was given a pack of 100 units from
which I retrieved about 60 units which were presentable.
naira notes My experience shows that while the CBN is
withdrawing old currency notes from circulation new
currency notes are not being issued as replacement. The
cash-lite policy is meant to encourage the use of
electronic means and cheques in financial transactions.
There are a number of platforms for making payments
by electronic means and it would appear that each
platform has it own telecommunications service. The
result is that there are situations in which a bank branch
is unable to access a payment platform and the person
making the payment is advised to come back the
following day in order to obtain a receipt of the
transaction. In the case of one particular payment
platform, it appears transactions are initiated at the
central offices of the banks and there is a definite time-
lag between when the sender approaches a bank branch
and when the payment reaches the receiving bank. This
leads to a situation in which it is preferable to withdraw
cash from one bank and make a payment directly into
an account at another bank. The difficulties with our
telecommunications system centre on the disappearance
of local telephone services provided by Nigerian
Telecommunications Plc, NITEL. The cable systems
which NITEL had in place should be the backbone of
our data transmission. However, even before NITEL
went out of business, parts of the underground cable
system linking the telephone exchanges in the Lagos area
had been vandalised and telephone services lost in some
neighbourhoods. The lack of telephone lines would delay
the deployment of point-of-sale terminals in our local
shops. For example, it should be possible for one to buy,
say, N320 worth of medicines at a local pharmacy and
have the payment made by electronic means. However,
the greater part of our transactions are outside of banks
and shops and for which transactions currency notes of
denominations of N200, N100, N50, N20, N10 and
N5 are needed. For example A4 size photocopy is
readily available at N5 per page. Also, a newspaper
vendor would find it difficult selling his consignment if
most customers come along with N500 currency notes to
purchase a N150 newspaper. Significant economic
activities that are affected by a lack of currency notes are
the payment of fares on public transportation, the
purchase of cooked food from food vendors and the
purchase of foodstuffs. The tendency would be for
transport fares to be rounded up to the value of notes
that are readily available and a N120 fare may go up to
N150 as N50 notes are still available. Food vendors
have always adjusted the size of a food unit as the cost
of their inputs rise. They may now be able to increase
prices with smaller size increases in food units. The
CBN has talked about the cost of printing currency notes
and of managing their distribution. However, we should
also talk about the cost to individuals when the CBN
does not make currency notes available. As indicated
above, personal expenditure on food and transportation
will increase which will eventually lead to increases in
other goods and services. The suspicion is that all of
these difficulties are linked with the desire of the CBN
to print currency notes of N5, 000 denominations. If
the public is against this CBN proposal, is it not because
the N5,000 currency note would pave the way for
devaluation of the naira against the US dollar? Is it not
possible to run the Nigerian economy without further
devaluation? The CBN should ease the burden on the
public and make currency notes in denominations of
N200, N100, N50, N20, N10 and N5 readily
available.
CBN, in the denominations of N200, N100, N50,
N20, N10 and N5 are currently not readily available on
demand in banks in the Lagos area. Even the currency
notes in denominations of N500 and N1000 given out
by the banks are not clean and do not have a few new
notes in the packs as has been the practice in the past.
When one enters a banking hall and asks for currency
notes in denominations of N200, N100 or N50, the
usual answer is that the bank has not seen such notes
from the CBN recently. One bank advises that one
should come on a Monday because that is when the
bank receives deposits having currency notes of
denominations of N200, N100 and N50 from
churches. In one instance, a bank was rationing N200
currency notes in lots of 5 per person. At another bank,
I was able to obtain ten units of N200 currency notes
which I subsequently had to share with two other persons
who needed change for their customers. I recall that on
the last occasion that I obtained N100 currency notes
from a bank, I was given a pack of 100 units from
which I retrieved about 60 units which were presentable.
naira notes My experience shows that while the CBN is
withdrawing old currency notes from circulation new
currency notes are not being issued as replacement. The
cash-lite policy is meant to encourage the use of
electronic means and cheques in financial transactions.
There are a number of platforms for making payments
by electronic means and it would appear that each
platform has it own telecommunications service. The
result is that there are situations in which a bank branch
is unable to access a payment platform and the person
making the payment is advised to come back the
following day in order to obtain a receipt of the
transaction. In the case of one particular payment
platform, it appears transactions are initiated at the
central offices of the banks and there is a definite time-
lag between when the sender approaches a bank branch
and when the payment reaches the receiving bank. This
leads to a situation in which it is preferable to withdraw
cash from one bank and make a payment directly into
an account at another bank. The difficulties with our
telecommunications system centre on the disappearance
of local telephone services provided by Nigerian
Telecommunications Plc, NITEL. The cable systems
which NITEL had in place should be the backbone of
our data transmission. However, even before NITEL
went out of business, parts of the underground cable
system linking the telephone exchanges in the Lagos area
had been vandalised and telephone services lost in some
neighbourhoods. The lack of telephone lines would delay
the deployment of point-of-sale terminals in our local
shops. For example, it should be possible for one to buy,
say, N320 worth of medicines at a local pharmacy and
have the payment made by electronic means. However,
the greater part of our transactions are outside of banks
and shops and for which transactions currency notes of
denominations of N200, N100, N50, N20, N10 and
N5 are needed. For example A4 size photocopy is
readily available at N5 per page. Also, a newspaper
vendor would find it difficult selling his consignment if
most customers come along with N500 currency notes to
purchase a N150 newspaper. Significant economic
activities that are affected by a lack of currency notes are
the payment of fares on public transportation, the
purchase of cooked food from food vendors and the
purchase of foodstuffs. The tendency would be for
transport fares to be rounded up to the value of notes
that are readily available and a N120 fare may go up to
N150 as N50 notes are still available. Food vendors
have always adjusted the size of a food unit as the cost
of their inputs rise. They may now be able to increase
prices with smaller size increases in food units. The
CBN has talked about the cost of printing currency notes
and of managing their distribution. However, we should
also talk about the cost to individuals when the CBN
does not make currency notes available. As indicated
above, personal expenditure on food and transportation
will increase which will eventually lead to increases in
other goods and services. The suspicion is that all of
these difficulties are linked with the desire of the CBN
to print currency notes of N5, 000 denominations. If
the public is against this CBN proposal, is it not because
the N5,000 currency note would pave the way for
devaluation of the naira against the US dollar? Is it not
possible to run the Nigerian economy without further
devaluation? The CBN should ease the burden on the
public and make currency notes in denominations of
N200, N100, N50, N20, N10 and N5 readily
available.
