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Is the coin still a legal tender in Nigeria?

18 August 2014, 14:21 Obaro

Under the colonial rule, local currencies which include coins were issued, this was to further ensure a balance in the currency structure and unit of accounts as well as ease transactions, punishing those who refused to use them. It wasn’t until the 1991 currency re-structuring that people’s attitudes and acceptance of the coin began to gradually change, when the then military administration issued a new N50 bank note and turned 50 Kobo and 1 naira bank notes into coins. Many Nigerians saw it as an attempt to make the lower denomination unsuitable for transaction.

No Society can do without coins because of its role in facilitation of transactions, the coins reduced the tendency to approximate transactions to the nearest bank notes, it makes change available for daily transactions, it was in the line of these that the Central Bank of Nigeria (CBN) re-introduced the coins on February, 28th 2007, as part of the economic reforms, N50, N20,N10 and N5 bank notes as well as N1 and 50 Kobo coins were re-issued with new designs, while a new N2 coin was introduced.

Also read: CBN to circulate new coins alongside old notes

The CBN directed that all banks should pay two (2) percent of all withdrawals in coins, this means for instance, if a customer was withdrawing N20,000 from his bank account, he has to go home with coins worth N400 to spend. The same CBN directed the banks not to accept coins as deposits from the public until further notice, giving reasons that the coins needed to be kept in circulation for sometime. Before the re-introduction of coins, goods were priced in multiples of fives because of the dearth of coins and this affected price levels greatly, no goods could be bought for N1 because no such denomination existed, so prices of the lowest- priced goods were raised to N5 and N10. Unfortunately and sadly, we are back to that situation.

The coin has suffered untold rejection and abuse from the public because Nigerians are not better educated and enlightened on the need to have it in circulation. The situation whereby the naira notes have been turned into writing sheets,  even by those working in the bank, stained by meat sellers and squeezed by buses and taxi driver has worsen the battered naira and hence the need for the use of coins to be enforced.

Also read: Couple finds gold coins worth millions buried in yard

If developed countries like the USA and China use the coin for their daily transactions, then it shows its importance and advantages to the economy. As a matter of urgency the CBN should send a bill to the national assembly to be passed into law, this bill should criminalize rejection and any form of abuse of the coin and a minimum sentence of six months imprisonment with an option of a fine should be enacted. Furthermore, like it is done in China and the USA, the government should designate some business places and establishments as no banknote-for-transaction, places like Post Offices, toll-gates, licensing offices, school business centers, lottery centres, cinemas e.t.c should only transact in coins. Those are ways by which the government can intensify the campaign for the use of coins in all transactions so that the unemployed and poor Nigerians can survive.

Disclaimer: All articles and letters published on MyNews24 have been independently written by members of News24's community. The views of users published on News24 are therefore their own and do not necessarily represent the views of News24. News24 editors also reserve the right to edit or delete any and all comments received.

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