Paying more than necessary
What has gradually become a norm in our country today is the reluctance and unwillingness to give ‘change’ by sellers to buyers of goods and services. It is an embarrassing situation that people have found themselves in almost on a daily basis. When a buyer purchases an item or commodity with a higher money denomination in anticipation of collecting ‘change’, what happens at the end of the day is that such monies end up in the pockets of sellers of the commodities. This problem, which I think is more of social or attitudinal, rather than economic or financial, has been with us in this country for many years. The only difference now is that, it has assumed a magnitude that needs to be reversed, as much as possible. Everyone is guilty on this; the market women, domestic servants, taxi drivers, recharge card sellers, food vendors and so on.
Denominations of N1, 50k, 25k, 10k and 1kobo were issued by the Central Bank of Nigeria in the 1990s, ill-fated Structural Adjustment Programme led to their extinction, as higher note denominations of N5, N10, N20, N50, were adopted to take care of the traditional roles associated with lower denomination coins but rather, these notes became unattractive and dirty national symbol. Currently, the nation’s legal tenders include 50 kobo, N1 and N2 while note denominations are N5, N10, N20, N100, N200, N500 and N1,000. Although, coins can last over 50 years of active usage unlike currency notes that depreciate fast, but people would still rather prefer to hold and spend currency notes. Why this spending pattern? To begin with, many Nigerians dislike coins because they are cumbersome to carry. As a result of this, the least currency denomination naturally takes the place of the coin with the highest monetary value in a country where it is impossible to find a product that is sold for N1.
Secondly, the high inflationary level in the country has ‘pushed’ prices of commodities to a level that the need for coins is absolutely minimal. Why carry lots of coins when single notes can come in handy? Another factor is the social/community life of the people that involves the use of money at functions such as weddings, chieftaincy, funerals and house-warming, among others. During these events, hardly do we see people spending coins. People would rather prefer to ‘spray’ notes than touch coins. Over the time, people have become almost completely detached from the use of coins as legal tender in Nigeria. Even beggars hardly accept coins from anybody, nowadays. It’s either you give Naira notes or you keep your money. I’ve severally heard of beggars refusing to collect coins from generous givers; they simply tell them to either give notes or keep their coins.
Mallam Kaja is a popular beggar with a principle that he does not collect anything less than N200. According to him, he chooses those to beg and decides the least amount to take. He is always around the market area in the country. Just like motorists plying the road he usually stays, his attention is firmly fixed on the traffic light. The only difference is that, unlike those in cars and on motorcycles, who are eagerly waiting for the ‘green light’ before proceed, Mallam Kaja loves it when the traffic light shows ‘red’, which enables him solicit for alms. Quite unlike the numerous hawkers and other beggars who dot his area of operation, Mallam Kaja is highly selective, as he would only approach those in brand new and flashy cars, he disclosed that he does not collect anything less than N200, because his needs are numerous and expensive. As the value of the country’s money declines, his minimum amount to be collected also increases. Imagine that!
In the real sense of it, do we really blame these persons? It is not only that too many coins become heavy burden to carry about; the incidence of too many coins chasing few goods is a truism that people would not want to stress themselves up unnecessarily. The annoying thing about this awkward development is that, if you are the type that believes in doing things rightly, you are likely to incur the wrath of other people. When you give out a high Naira denomination and expect people to give you ‘change’, you are simply inviting trouble for yourself. What you get are heaps of insults, disrespect, scorning and disdain. This happens when a motorist purchases fuel worth N4,850 and gives out five notes of N1,000, making N5,000. What we see is that the fuel attendant would simply claim that there is no ‘change’, and pockets the entire money notes without any hesitation. Not only that, the language and manner of the conversation would be so rude that makes it discouraging to even for ‘change’. What this means is that people are forced to pay more than necessary on a daily basis.
Recently, the Senate made moves to encourage the conversion of lower currency notes into coins to facilitate retail transactions in the country; in a bid to make the use of coins compulsory, as means of exchange through cash transactions. To achieve this, Senate asked the CBN to sanction any commercial bank that refuses to collect coins from customers, even as it urged the apex bank to redesign the nation’s currency to cater for what it described as ‘highly repetitive transactions’ in the economy. Coins are fast going out of fashion and going into extinction because of the face value of the metal that is used in producing it, is lower than its intrinsic value because some people are allegedly taking those coins to goldsmiths to turn them into jewelry and other ornaments for sale.
No doubt, the acceptance or rejection of the use of coins appears to be more of social and habitual. In other countries, people have imbibed the habit of spending coins because many things can be bought with coins due to the high purchasing power. That is why I don’t think the use of coins is likely to enjoy any acceptability in the country, at least, for now. What should interest those in relevant authorities is how to strengthen our Naira and reduce the high inflation in the land that would make basic commodities affordable. More importantly, we should change the wrong and embarrassing attitude of not wanting to give ‘change’ to people during financial transactions. It should not be encouraged. This attitudinal change should begin with you and me.
Kupoluyi wrote this piece from Federal University of Agriculture, Abeokuta