Nigeria: Why Coins Are Not in Circulation

[Arizona Coin Collector]

FROM:
http://allafrica.com/stories/200902250366.html

Nigeria: Why Coins Are Not in Circulation

Halima Musa
25 February 2009

Despite huge amount of money spent by the Central
Bank on sensitizing Nigerians on the need to accept
coins, business men and banks in Kano have
continued to reject the currency.

Investigation by Daily Trust revealed that coins
were not in circulation because of its rejection
by the market people and banks.

Daily Trust can report that the Central Bank under
Chukwuma Soludo had printed currency including
coins twice and had spent millions of Naira in
its sensitization campaign.

Market people and bankers interviewed in Kano
said the rejection of coins by the banks made
them to equally reject it in their business
transactions.

But the Oceanic Bank told Daily Trust that it
accepts coins from its customers, and that it
has no problem with the CBN. The bank source
does not want his name in print.

Alhaji Abdullahi Adam, a manager in one of the
departmental stores in Kano said rejection of
the coins by banks compelled them to also reject
it, adding that even as he spoke he has in stock
pile of coins which were rejected by the banks.

He further revealed that, "the banks are not
rejecting only coins they reject even such notes
of lower denominations like N10 or N5, and where
they accept they impose extra charges of N1,000
for each N10,000 collected."

Adam said the non circulation of coins in the
market has led to increase in prices of wares,
"an item we are supposed to sell at the cost
of N7, we now sell it at N10 because of lack
of coins.

Speaking in the same vein, a member of the
bureau de change in Kano, Alhaji Ismail Isa
said they don't even see the coins let alone
reject it.

He said lack of the coins have been affecting
their business, because according to him
transaction of that nature requires the coins.

"Sometimes we could change some dollars with a
balance of the coins but because it is not in
circulation we are forced to forego it," he
said.

Responding to the allegations, an assistant
manager with one of the banks in Kano who
prefers anonymity said rejection of coins by
the central bank was the reason why other
banks were also rejecting.

He said his bank has coins in large quantity
piled up in their strong room not knowing what
to do with it.

"Any time we decided to take the coins to our
regional office they would ask us to leave them,
saying the central bank were not accepting them
under the pretext that they were still in
circulation," he said.

On the allegation of extra charges for lower
denominations, the assistant manager said the
extra charges was in compensation for the extra
time the bank staff take in counting the money
and sometimes it was for the repair of their
counting machines that breaks down because of
undue pressure exerted on it while counting the
lower denominations.

H e therefore advised the central bank to convert
the coins to naira notes for easy handling.

The Central Bank spokesman Festus Oodoko did not
pick several calls put to him by our reporter.

But an official in the information department
of the CBN who sought anonymity said it is not
true that the CBN was rejecting coins returned
to it by the banks.

..