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