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Nigeria: Calls to increase use of coins

Started by eurocoin, March 23, 2022, 05:19:15 PM

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eurocoin

Enforce use of coins, Reps urge CBN

The House of Representatives has urged the Central Bank of Nigeria to "reinforce the use of coins as a legal tender and ensure that banks comply with the use of coins to the fullest." Members of the House had at the plenary on Tuesday unanimously adopted the motion moved by a member, Muda Umar, titled 'Call on the Central Bank of Nigeria to Reinforce the Use of Coins as a Legal Tender in Nigeria.'

Umar, while moving the motion, recalled that a former Governor of the Central Bank of Nigeria, Lamido Sanusi, on February 28, 2007, reissued N50, N20, N10 and N5 banknotes with new designs as well as the coining of N1 and 50 kobo, while a new N2 coin was introduced, as part of the economic reforms. The lawmaker said despite the huge budgetary sum that was expended by the Federal Government in the production of coins as part of the country's legal tender, "the said coins seem to be extinct at the moment."

He said, "The day-to-day business transactions of ordinary Nigerians have been significantly affected, as the lack of coins and other lower denominations have resulted in prices being summed up to the nearest naira equivalent, a situation that can best be described as inflation in economic terms.

"The House is worried that while other countries make use of coins for their daily financial transactions, the Nigerian coins, comprising 50kobo, N1 and N2, have not been fully utilised in that regard. "The House believes that injecting low denominations and coins into the economy will go a long way in curbing price inflation and stabilizing the economy."

Pabitra

Are those coins of 2 Naira and below still lying in bank vaults?
The later denominations suggested were 5,10 and 20 Naira but even almost signing the contract with South Africa mint, the contract was cancelled due to strong political opposition.
With inflation being on the higher side, the present required denominations would perhaps be 20, 50 and 100 Naira coins.

eurocoin

Reps Task CBN to Enforce Use of Coins for Transactions

By Aduragbemi Omiyale

The House of Representatives has called on the Central Bank of Nigeria (CBN) to ensure commercial banks operating in the country use coins for transactions, stressing that they remain a legal tender.

At the plenary on Tuesday, the lawmaker from Bauchi State, Mr Muda Lawal Umar, said the nation spent scarce resources to mint the currency but lamented that it is not used to the fullest. According to him, the refusal to use coins in Nigeria has significantly affected smooth financial transactions, especially Nigerians, who now bear the brunt of prices summed up to the nearest Naira equivalent.

He said "despite the huge budgetary sum that was expended by the federal government in the production of coins as part of the legal tender, the said coins seem to be extinct at the moment. "The lawmaker said as a result of this, "the day to day business transactions of ordinary Nigerians have been significantly affected as the lack of coins and other lower denominations have resulted in prices being summed up to the nearest Naira equivalent, a situation that can best be described as inflation in economic terms."

Mr Umar expressed worry "that while other countries make use of coins for their daily financial transactions, the Nigerian coins comprising 50 kobo, N1 and N2 have not been fully utilised in that regard [and] injecting low denominations and coins into the economy will go a long way in curbing price inflation and stabilizing the economy." He reminded the House that on February 28, 2007, as part of the economic reforms under the former Governor of the CBN, Mr Sanusi Lamido Sanusi, N50, N20, N10 and N5 banknotes were reissued with new designs as well as the coining of N1 and 50 kobo, while a new N2 coin was introduced.

The congressman, therefore, urged the CBN "to reinforce the use of coins as a legal tender and ensure that banks comply with the use of coins to the fullest." After leading the debate with contributions from other members, the motion received a unanimous voice vote.

eurocoin

Taken from the local media:

According to Professor Mike Obadan, an economist who chairs Goldmark Education Academy, Benin City and also serves as non-executive director/member, Monetary Policy Committee of the CBN noted that the cost of minting coins would be huge and might become a burden.

"It will just add so much to the cost of printing and minting. If the CBN is being directed to start minting lower denominations, I am not sure what it will achieve in terms of stemming inflation, because it involves so much cost and even when you mint the coins, they may not be useful in buying anything because of the psychological elements in the pricing of goods and services and the current inflation," he stated.