Low Purchasing Power Chasing Coins out of Circulation – CBN

Dr. Sarah Alade, acting governor, Central Bank of Nigeria (CBN) has said that that the low purchasing power of the coin as opposed to other currency denomination is a major reason for its limited circulation.

Alade, stated this during a school mentoring programme on financial literacy for students of Model Secondary School, Maitama, Abuja.

The event is part of celebration marking the Global Money Week, which is a money awareness 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 scarcity of coins, however, said despite its limited circulation, the apex bank still regards it as a legal tender in the country.

Alade said the bank is 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 a vending machine that would make the coin its major source of transaction.

She said this can only be possible when the currency restructuring programme which was put on hold by President Goodluck Jonathan following protests by Nigerians takes off.

She said, “We still have coins but because 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 tender in the country.”

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