It is evident that the lower denomination notes play a cardinal role in consolidating and fostering small-scale businesses. The scarcity of this category of currency notes in circulation gives small-scale traders and their customers a serious headache and is dragging them into ineffable imbroglios across the country.
In fact, this menace of shortage of the lower denomination naira notes, ranging from N100 to N5 is now being witnessed and felt across the country, especially in the northern part of the country, as a result of the redesignation of the country’s highest denomination naira notes, which include N1,000, N500 and N200 and their withdrawal from circulation.
Millions of small-scale traders and their customers have been grumbling and showing concern over the lingering scarcity of the country’s lower denomination naira notes as it disrupts their businesses.
Economists, financial experts, and bankers have over the years been forewarning that the inadequacy or lack of circulation of lower denomination notes adds fuel to the flame of inflation. A crucial question to be raised here is what is the reason behind this menace in the country?
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Economists and financial experts used to raise the alarm for Nigeria’s leaders whose markets are dominated by higher denomination notes to be prepared for suffering from the serious setbacks of economic crisis and collapse. This is in the realisation that filling Nigeria’s markets with the higher denomination naira notes is the major reason behind the country’s current high inflation.
It is refreshing that in November 2022, during the Monetary Policy Committee (MPC) meeting in Abuja, the CBN governor, Godwin Emefiele said,” Nigerians want to carry N1000 or N500. In fact, we are beginning to see or think that increasing the high denomination bills is also part of what may even be fueling inflation.
“So, over time, we will reduce the volume of N500 and N1000 in circulation. Let people carry N50 around. Increasing the high denomination of the currency could be part of the factors fueling inflation in the country.”
I, therefore, call on the CBN governor to spare no effort to ensure the availability of lower denomination naira notes in every nook and cranny of the country in order to fill Nigeria’s markets with them. The existing ones that are mutilated should be withdrawn and replaced with new ones.
Mustapha Baba Azare, Bauchi State [email protected]
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