Nigeria’s Central Bank wants us to go cashless, and we have seen more ATMs (less than 40% actually work) and POS Terminals in malls, fuel stations, churches and restaurants.

It’s actually faster and ‘safer’ to do transactions this way as it eliminates the need to collect change or store money physically.

But recently, I’ve observed an issue that has to do with the increasing scarcity of ‘change’ (N10, N20, N50 and N100). If you can take a moment to consider, you will agree that these notes are fewer in circulation now.

I learnt from an unverified source that the Central Bank now prints less of the lower notes and prints more of the higher ones (N200, N500, N1000).

This is a perfect explanation for the scarcity of change in most cities in Nigeria. Look at this scenario:

– Central Bank prints little amount of lower notes;

– ATMs only dispense N1,000 (a few exceptions where the machine gives you a torn N500 note).

So eventually, these lower notes end up in the bank, go out of circulation and never comes back out.

My question now is what happens to the commercial buses, local food markets, and street vendors. Should they all go and buy POS Terminals because they deal more in smaller denominations.

Will Nigerians need a POS Terminal to pay for N100 ‘suya’ (kebab) from the ‘aboki’ at the junction?

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What of the vulcanizer who just ‘guaged’ my tire?

Or the gala hawker, ‘pepsi-lacasera’ sellers?

Danfo conductor

How do we handle the always-raging ‘danfo’ and ‘molue’ conductor?

How is the informal market going to fit into this scheme?

Nigeria is very flexible and will find a balance, but it will be rough, especially because our formal economy is actually sustained by a more ‘stable’ informal economy.

I wrote this piece to start a discussion and I will really love to have reactions, either by commenting or writing a reply post if you have a channel (blog/ column, etc).

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