Naij.com Blogger Oseni Obaro Urges Government To Re-Introduce Nigerian Coins
Our guest blogger Oseni Obaro discusses the importance of Nigerian coins and urges the government to stimulate coin circulation.
Nigeria abandoned the British pre-decimal currency system in 1973. Kobo coins were introduced together with naira banknotes in order to ensure balance in the currency structure as well as ease transactions, punishing those who refused to use coins.
It wasn't until the 1991 currency re-structuring, when the then-military administration issued a new N50 banknote and turned 50 kobo and N1 banknotes into coins, that peoples' attitudes and acceptance of coins began to gradually change.
Many Nigerians saw it as an attempt to make the lower denomination unsuitable for transaction.
No society can do without coins because of its role in transaction facilitation. Coins reduce tendency to approximate transactions to the nearest banknotes. Coins make change available for daily transactions. It was because of this that the Central Bank of Nigeria (CBN) re-introduced the coins in February 2007 as part of the economic reform. N50, N20, N10 and N5 banknotes, as well as N1 and 50 kobo coins were re-issued with new designs, while a new N2 coin was introduced.
The CBN directed that all banks should pay two (2) percent of all withdrawals in coins. This meant that if a customer was withdrawing, for instance, N20,000 from his bank account, he had to go home with N400 worth of coins to spend.
The same CBN directed banks not to accept coins as deposits from the public until further notice, making sure that the coins were kept in circulation for some time.
Before the re-introduction of coins, goods were priced in multiples of fives because of the dearth of coins. This affected price levels greatly: no goods could be bought for N1 because no such denomination existed, so prices of the lowest-priced goods were raised to N5 and N10.
Unfortunately and sadly, we are back to that situation today.
The coin has suffered untold rejection and abuse from the public because Nigerians are not educated and enlightened on the need to have it in circulation. It's common to see the naira notes being turned into writing sheets, even by bank workers, stained by meat sellers and squeezed by buses and taxi drivers. The number of damaged naira banknotes is on the increase, hence the need for the use of coins to be enforced.
Suffice it to say that, by using coins for daily transactions, developed countries like the USA and China show the importance of a coin and its advantages to the economy.
I think, the CBN should send a draft bill to the National Assembly which would criminalize rejection and any form of abuse of the coin and a minimum sentence of six (6) months imprisonment with an option of fine.
Furthermore, like it is done in China and the USA, the government should designate some business places and establishments where no banknotes would be accepted for transaction (post offices, toll-gates, licensing offices, school business centers, lottery centres, cinemas, etc.)
By applying some measures, the government could intensify the campaign for using of coins in all transactions so that the unemployed and poor Nigerians can survive.
Within the framework of our guest blogging project, Mr. Obaro has already raised an important question of what future will hold for the Chibok girls abducted by Boko Haram once they're released; he has wondered if Nigeria will ever again know times of uninterrupted electricity supply.
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Source: Legit.ng
