Scarcity of lower currencies (denominations) such as N5, N10, N20, N50, N100 and N200 spells doom for Nigeria.
An economist, Dr. Emma Gospel Isong told DAILY POST in a telephone interview in Calabar on Wednesday that the development was bad for Nigeria’s economy.
“The scarcity of lower denominations in an economy in Nigeria is indications of three factors. The volume of transaction at the lower level is poor, people who are earning such money at level of transaction are poor”, he said.
“This also shows the level of inflation in our economy. When you talk about economic program, it must translate to the people at the local levels (communities) and the lower market.
“These are traders that use these currencies. Virtually, they use and transact with these currencies. In fact, this shows us that inflation is catching up on these petty traders.
“The effect of the scarcity of these kinds of currencies is also showing on the positive side, the level of banking habit has increased, may be because of the introduction of BVN and small scale loans, many people who were holding these currencies easily banked them through transfer of fund.
“The scarcity of the currencies is also positive, the technological transfer is increasing and banking habit has improved in the system.”
According to him, the vulcanizer, truck pusher, taxi driver, akara seller, ground nut seller, etc now consider point of sale (POS) for transactions.
“They pay or buy with POS, this is positive; but in real economic unit, the scarcity resulted to inflation meaning that all unit of pricing will be effected.”
He, however, said the introduction of control price measure can help Nigeria promote local currency.
“The volume of transaction is not high, we should stimulate small businesses, people frying akara, akamu, road side traders should be stimulated, it is stimulation of these kind of businesses that bring up the circulation of lower currencies.”
Isong further regretted that in Nigeria, only the poor people use lower currencies.
“In Nigeria there are people who have not touch N5, N10, N20, N50, N100; they don’t have contact with these denominations, we should discourage this.
“We should take pricing policy seriously” he pleaded.