In Nigeria, the N5, N10, and N20 notes are rapidly losing their relevance in daily transactions due to rising prices that have stripped them of purchasing power. These low-denomination notes, once useful for buying everyday essentials, transport fares, and small items, are increasingly being sidelined. A recent field exercise in Lagos revealed that finding something to buy with these notes has become increasingly difficult.
At a roadside provision shop in Ketu, Lagos, a trader, Iya Aliyah, reacted with frustration when asked if she had any items that could be bought for N10 or N20. She dismissed the offer, indicating that such amounts are no longer useful for purchasing even the smallest items. This reaction was not isolated, as similar responses were encountered across markets, kiosks, and motor parks in Lagos.
Traders and transport workers in various locations, including Berger, Ojota, Ketu, Mile 12, and Ikorodu, were asked what could be bought with N5, N10, or N20. The responses consistently showed that the purchasing power of these notes has significantly diminished. For instance, a grocery trader in Ketu, Mr. Emmanuel Ezeudo, stated that the least item in his shop is sold for N50, and he no longer accepts or provides change in the low-denomination notes.
The situation was similar at a roadside stall in Ojota, where a trader, Chinedu, explained that prices had moved beyond the amounts represented by the small notes. In Ikorodu, a shopkeeper, Eunice Ajayi, expressed amusement when asked about the N10 note, stating that she had not seen it in a long time. A trader at Mile 12 market, Idowu Olaitan, dismissed the idea of selling an item for N5, saying it was not worth his while.
The decline of small denominations in transport transactions is also notable. As petrol pump prices increased, transport fares rose, pushing the small notes further out of everyday transactions. A commercial tricyclist, Friday Onoja, stated that the least fare is now N100, while a commercial bus driver, Yusuf Abiodun, explained that transport fares to Maryland from Ojota cost N300, with any drop along the route costing N200.
However, a contrast was observed at supermarkets, where some items are displayed with price tags that allow customers to spend or collect change in lower denominations. At Boku Supermarket in Ketu, items such as Dano Milk and Three Crown milk are sold for prices that enable customers to use or receive change in smaller denominations. A cashier noted that the scarcity of small denominations sometimes creates bottlenecks, but they still use them when available.
A search for N5, N10, and N20 notes around Berger revealed that they are surprisingly difficult to find. Eventually, a few individuals produced some of the notes, with one woman explaining that she had kept them tucked away in a book in her shop. The scarcity of these low-denomination notes highlights their diminishing role in everyday transactions.
Key points
- The purchasing power of Nigeria's low-denomination notes (N5, N10, and N20) has significantly eroded due to inflation.
- These notes are no longer widely accepted in transactions, with many traders and transport workers preferring higher denominations.
- The decline of small denominations has been particularly noticeable in transport transactions, where fares have risen with increasing petrol pump prices.
