Era of Defaced Naira Notes
Sunday Ehigiator looks at the implications of the large quantities of defaced, mutilated and filthy naira notes currently in circulation
It's lunch time in Lagos, Nigeria's commercial capital, and the streets have come alive.Workers are enjoying midday meals and eateries are making cool business. But at a popular fas food joint on Isaac John Street, Ikeja, an argument rages between a customer and the sales representative.
It’s lunch time in Lagos, Nigeria’s commercial capital, and the streets have come alive. Workers are enjoying midday meals and eateries are making cool business. But at a popular fast food joint on Isaac John Street, Ikeja, an argument rages between a customer and the sales representative. The bone of contention is a torn naira note the customer had been given as change after her purchases.
People intervened to settle the quarrel. But it was discovered that nearly all the lower denomination notes – particularly N100 and N200 – held by the restaurant owners were actually defaced and badly mutilated. From writings on the bills to torn and taped parts, the condition of the currency notes exposed a crisis many Nigerians are currently enduring with their country’s currency.
Health Implication Aside the destruction of the aesthetic beauty of the naira notes, health experts say most of the mutilated currency notes in circulation harbour pathogenic microorganisms hazardous to human health. These microorganisms harbour infectious bacteria and viruses that cause health issues, such as diarrhoea, food poisoning, and respiratory problems. These diseases have been proven to be spread through the notes.
The CBN spokesperson, Mr. Isaac Okorafor, blamed the banks for the mutilated naira notes currently in circulation via his Twitter handle on February 26. But the situation doesn’t look like it will end anytime soon.
Blame Game Okoroafor said, "Lower denomination notes have greater velocity of circulation, meaning they are frequently in use and get abused. Several factors account for the existence of worn out notes and they include the abuse mentioned above and the attitude of banks who fail to return them for reissue."
The number of deformed naira notes in circulation in Nigeria, particularly in Lagos, is alarming.
THISDAY investigation revealed that the bad notes are given to customer in over the counter as well as Automated Teller Machine (ATM) transactions. They disburse dirty and unfit notes.
Meanwhile, as the notes circulate, the commercial banks and the Central Bank of Nigeria (CBN) have been trading blames over who is responsible, directly or indirectly, for the situation.
More worrisome to bank customers is the fact that currencies dispensed by the ATM’s are been mixed-up with filthy notes. And when they take it back/inside the bank to redeposit the notes, the banks reject them.
Complain Speaking with THISDAY, a customer of one of the popular commercial banks at FESTAC Town, who simply gave his name as Tunde, said, “I had come here to withdraw some large amount of money, but on getting to my car, I realised that about three bundles of the entire money I received was totally damaged and unfit for use. I immediately went back to return it, but when I brought it back to them, they rejected the money and in fact, denied ever paying the money to me. But because I was in a hurry to travel down to Abeokuta same day, I avoided creating a scene in the banking hall and could not push further."
At the front of one of the branches of a bank along Isolo Road, another bank customer simply identified as Rodiat told THISDAY that she went to deposit money that she had just withdrawn from the bank’s ATM, but the teller rejected some notes and told her that if she collected them, the amount would be deducted from her salary.
She said, “I withdrew N100,000 from the ATM just now, almost nine thousand naira from the money was very bad. So, I took it back with the aim of re-depositing it and withdrawing again from another ATM, because the notes were too weak and some dirty. In fact, it wasn’t just me that had same complaint. Another customer also had same experience with me but when we got to the bulk room, the lady I met rejected the notes. I even told her I just got it from their ATM but she refused to take it back."
THISDAY checks carried out on customers in 30 branches of 15 different banks in Lagos, which included the top five leading banks in Nigeria, showed that there were more dirty notes than clean ones in circulation.
Legal Consequence A bank customer and lawyer, who preferred anonymity, expressed serious worry about the alarming amount of dirty and mutilated currency notes in circulation, described it as a national embarrassment, adding that despite the arrest and subsequent prosecution of the culprits, the trend seems to have no end.
He alleged, "There is still a cartel in CBN and commercial banks, which make brisk business recycling old naira notes meant for destruction. They enrich their bank accounts and acquire properties through these illegal proceeds by converting the equivalent of the mutilated notes into their accounts and selling printed mint, meant for customers, to touts and hawkers.
“Section 21(4) of the CBN Act of 2007 makes it a punishable offence for any person to hawk, sell or trade in naira notes, coins or any other issued by the apex bank.
"Most of the bad notes are already torn beyond recognition and the amount CBN charges commercial banks is too small to warrant such national embarrassment. Some of these notes can be compared to paper only fit for trash. The fact that they are still been exchanged as legal tender is so surprising."
While calling on the apex bank to find
Lower denomination notes have greater velocity of circulation, meaning they are frequently in use and get abused. Several factors account for the existence of worn out notes and they include the abuse mentioned above and the attitude of banks who fail to return them for reissue