In effect, the urban culture appears to have single-handedly defeated or contributed in no small measure to the apparent inefficacy of every well thought-out monetary or fiscal policy contrived by every government through their plethora of economic technocrat and aimed at positioning Nigeria’s economy in better stead.
The saying that had gained ground more rapidly than our currency had gained at the foreign markets has it that Nigeria’s economic situation defies every known postulation, logic and solution; including those that had worked for other countries even if temporary.
Regrettably, emerging facts show the situation of the country’s economy is rather self inflicted; Nigerians have by their own unwholesome culture of rounding up figures, prices and cash transactions nailed the country’s economy permanently except of course a turnaround in terms of attitudinal change is effected.
The culture of rounding up prices in cash or electronic transactions which in its immediate effect renders the coins and other smaller currencies redundant and economically valueless also in longer terms forces more higher denominations into circulation and in effect driving hyper-inflation.
This culture that is speedily reaching the rural areas of the countries is a socio-economic trait of the urban Nigerian, a sort of carry-over from the ‘Udoji award’ era of the late 70’s Nigerian society where as a result of unusual increment in the wage structure much money went into circulation without a corresponding availability of local supply thus ensuring an unprecedented level of inflation.
For most Nigerians in the urban societies, the reality of the Udoji era is yet to phase out in their psyche, which therefore has ensured that nobody wants to touch the coins not even with a flag pole, hence, farmers, manufacturers and importers of finished goods acquired as a trend the culture of rounding up selling prices and cash value of the products.
As it is with the producers, so it is with the consumers. Nigerian consumers have refused to recognize or even appreciate the value of smaller denominations of the Nigerian currencies even though as experts agree there existed certain items that can and ordinarily be purchased with smaller notes or even the coins.
Fiscal and monetary policies and measures including those recommended by the International Monetary Fund (IMF) and World Bank which have worked in other economies, and which in addition take cognisance of the place and value of the lower denominations may have failed to impact positively in the case of Nigeria largely on the strength of the fact that Nigerians may be the ones shooting themselves in the foot by their inadvertent actions of refusing to value lower money
In the western economies, this culture of rounding up prices is forbidden hence you will still see price tags with .99 or any other value attached to them. But in Nigeria, the practice is a taboo as nobody cares. Both the producers and suppliers exploit the indifference of the populace to maximize profits.
In the service sector like the banks, cases abound of banks that have made astronomical profits feeding fat on seemingly ‘abandoned’ kobos and small monies of customers on the latter’s’ excuse of not wanting anything to do with them in their transactions.
In additions, banks and other financial institutions declare huge profits on COTs which to the customers appear like small monies because the charges have accompanying them.
“The problem has to do with false ego on one hand and a negative civilization on the other. Nobody wants to be seen with the smaller currencies so that people would not think you are poor. They’ll task if you are the poorest man or woman in the country. But it is wrong. In Ghana, they still have values for their smaller currencies. I’m talking of a country with a stronger currency than our own. In the United States, also, you’ll see goods and services carrying price tags with the dollars and cents. This country is different, I’m sure when you look into our GSM companies those tariffs if carefully investigated would show you that they are actually charging you in naira not kobo,” said Mr. Kayode Ajiboye, a marketing executive.
In Nigeria, the problems is not merely the case of coins not having economic value which would have been excuse in the case of Nigeria where the society has learned not to attach any face value to it, but rather that the people have sworn not to have anything to do with it.
From religious houses that no longer accept smaller monies, to even Okada operators and other operators who fix costs to round up fares for commuters, to filling stations who will neither give the customer change in smaller nor the customers in question accept to collect the change, the case is the same.
Services providers like the Power Holding Company of Nigeria (PHCN) are not left out in this exploitation of the masses, in the same way as telecommunications operators, Water Corporation and many more feed on the indifference of the society to smaller denominations of currencies.
From the banks who criminally attach kobos to the COTs that cannot be computed or justified, to the customers who when they see the kobo additions to their charges fail or are reluctant to ask questions thereby leaving the banks stacking the kobos to gather into millions of naira fleeced from unsuspecting bank customers, the guilty party remains the larger society at large for killing the country’s smaller monies.
“The sad reality is that it is not that these monies are valueless as we are made to believe. It is the society that has killed and thrown them out of circulation. If you go to some rural communities in Nigeria; at least the one I served in during my NYSC days, there coins still had values, both economic and face values. The problem is the urban, city lifestyle and culture where nobody wants to be seen as desperately hungry. But the irony of the situation is that we are all hungry. Drop N50 naira on the floor now and give it just 2 minutes and see if you’ll still see it there. We are just deceiving ourselves,” said Mr. James Ekeh, a landlord in Lagos.
Corroborating Eke’s opinion, a lawyer, Mr. Emeka Amadi believes the problem goes beyond price fixing as going by the present situation of things, sellers and producers alike would still round up prices because the populace or society would always refuse to accept smaller notes or coins.
“Look at pure water today, which ideally should not be selling for five naira. Pure spring water cannot sell for that price. But the problem is that the manufacturers cannot hike the price to N6.50, which would have been appropriate as selling price for them to afford to go to Ikogosi in Ekiti State or Gurara Falls in Niger State to transport the water to their factories. So at the end because they cannot increase or round up their price to the favoured N10 which would however have caused an uproar, the way out therefore is to sell tap water as pure water at N5 to the unsuspecting or should I even say the indifferent consumer,” Amadi said.
While the case of the over-chlorinated water as pure water remains a case in point in condemning the rounding up of price culture that of the importers of finished goods is even more disheartening.
Ideally a box of matches should never be sold in the market for more than N3 but then it is feared that if a box of matches were to be sold for that price majority of its buyers would have sought for alternatives because they would have felt that buying matches was indeed beneath their dignity, maybe opting for the gas lighter or electric lighter. And so a box of matches is sold for an astronomical price of N5, with feelers filtering in of a hike in price.
This, by extension might also provide answers as to why there has remained the prevalence of substandard goods and services in the Nigerian market despite attempts by relevant agencies to stem the anomaly. It can simply be explained away as the attempt by marketers, manufacturers, and suppliers to beat the cost of production or supply and thus stay in business.
As it implies, where it is possible to round up prices, they do and maximize profits by ripping off unsuspecting masses, however, where they cannot round up any increase in prices, they sub standardize the products, either directly or indirectly by contracting out production processes or entire production.
In Nigeria today, goods and services where locally sourced or imported are either over-priced or substandardized, or even both.
This entire culture of rounding up prices has unfortunately eaten deep into the fabrics of the larger Nigerian society by spreading into the rural communities, hitherto previously considered safe from this negative culture.
As it is today, even when a supplier or manufacturer attempts to acknowledge the smaller monies in terms of pricing, the same society looks on in suspicion as to the genuineness of both the product and the producer.
“I remember this one time long ago at Cele bus stop along the Apapa-Oshodi expressway, when bus conductor was charging N35 to Mile 2 and commuters were just standing there looking at him. I guess they thought the bus was one-chance. But the truth is that N35 was the real fare then and even now for the distance. This country is a funny place at times. Do you know that when the EFCC charges somebody for stealing money and the money is read out up to the last kobo, people do not even believe them until the money is rounded up in millions or billions,” said Anthony, a motor spare parts dealer in IIasamaja, Lagos.
It is advised that any meaningful fiscal policy to be embarked by any government must begin with a proper orientation directed at the society over the need to value smaller denominations of the Nigerian currencies, which, financial experts say is the first step in addressing the question of accountability among public officers.
It is seen that a situation where the society devalues smaller monies, the urge would then be for the corporate sector especially the money managers to sneak into purses and accounts to exploit the rather uninterested people. In the same way as public officers would only aim to steal millions in order to be noticed in the same society.
The rate at which the society keeps devaluing the smaller currencies places an even heavier burden and strain on the larger notes as they are put into higher demand in the market. This in the long run means that in no distant time calls would emerge for the introduction larger notes to handle the pressure on existing N1000 notes.
Nigeria is probably one of the few developing countries in the world today where the kobo is both valueless, even on the face value. The people do not want to touch it even if the economic platform is created for its value in circulation.
And that is a sad commentary of the socio-cultural and economic trend in Nigeria in this 21st Century.