ABUJA – Senate yesterday, mandated its committee on Banking, Insurance and other Financial Institutions to investigate the causes of scarcity of the lower denomination currency and report back to the senate in two weeks on how the issue can be resolved.
This was sequel to a motion: “Scarcity of lower denomination currency notes” by Peter Nwobochi (Delta North) in which he raised concern over the scarcity of 5,10,20,50,100 and even 200 naira notes.
In the motion, Nwobochi noted that the scarcity has posed a severe threat to the economy of the country, that is currently recovering from recession.
He warned that the consequences are worsening inflationary trends and expressed worry that banks no longer dispense lower naira notes on the excuse that they hardly receive it from the CBN
“The nation’s currency is highly essential and critical in national development and if mismanaged the economy is doomed with adverse effect on the people and the nation”, he stressed.
While lamenting that all developed economies operate with coins, a developing economy like Nigeria is not even using coins despite the glaring disadvantages from the absence of coins for routine transactions in the country.
He therefore warned that if the situation was not urgently remedied it might lead to total collapse of the economy.
On his part, Magnus Abe, suggested that the government should withdraw the small denomination if it is expensive to produce, pointing out that there is no need to retain them as legal tenders when they are not available.
He however noted that there was need to do everything to protect the economy and the currency, adding that this will protect the image of Nigeria.
In his remarks, Bassey Akpan asserted that the CBN has a duty to ensure adequate supply of money, irrespective of the currency. He said even though those in the city may not need small denomination so much, but in the rural areas where the majority resides, they need the lower denomination than the higher ones hence CBN has to consider this.
Samuel Anyanwu, in his contribution, noted that there were competent companies that can produce the polymer notes.
According to him, the CBN had complained that the polymer notes were expensive, saying they are expensive because those notes are printed abroad.
He suggested that there was need to look internally to get competent companies that can do the job locally, as there are companies that has good machines to do this, reiterating that if nothing is done to resolve the issue the economy may collapse.
Senator Momamned observed that even the ones in circulation were dirty and torn to be accepted as legal tender.
Senator Gobir noted that the use of lower denomination was a function of the economy, adding that there was need to increased local production of goods and services to make the lower currencies useful.
In his ruling, presiding Deputy Senate President Ike Ekweremadu disclosed that in other countries they limit their currency to small denomination, regretting that in Nigeria, the economy encouraged more circulation of higher currency.
“Fifty pounds is the highest to be seen in UK, in US it is hundred dollars, but in Nigeria it is one thousand note everywhere. It is something that the government should do something about”, he noted.