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Why coins are out of circulation – CBN

By on March 15, 2014

The Central Bank of Nigeria on Thursday said that the low purchasing power of the coin as opposed to other currency denominations was a major reason for its limited circulation.

The acting Governor, CBN, Dr. Sarah Alade, stated this on Thursday during a school mentoring programme on financial literacy for students of the Model Secondary School, Maitama, Abuja.

The event is part of activities to celebrate the Global Money Week, which is an awareness campaign that takes place between March 10 and 17 every year to engage children globally in learning the concept of savings and investment.

Alade, who was responding to a question asked by one of the students about the reason for the scarcity of coins, however, said despite their limited circulation, the central bank still regarded them as legal tenders in the country.

She said the bank was working on some initiatives that would encourage the use of coins by Nigerians.

One of such initiatives, according to her, is the planned introduction of vending machines that will make coins their major source of transaction.

Alade said this could only be possible when the currency restructuring programme, which was put on hold by President Goodluck Jonathan following protests by Nigerians, took off.

She said, “We still have coins but coins cannot really buy much. If I give you one kobo now, what can you buy with it? Nothing.

“Sometimes, even 50 kobo can’t buy much and that is why we are hoping that very soon, we will be able to have a vending machine so that we can have coins so that people can be able to buy things.

“When we do the new currency, which we want to do, we will be able to integrate coins and be able to use coins for other things. So, coins are still legal tenders in the country.”

Alade also advised the students to imbibe the culture of savings and investment, adding that majority of banks had developed products for children.

 

 

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