The traditional ruler, Ademola Ajibola, introduced the TLK voucher in August 2021 as a means of exchange within Ijara-Isin.
After Silifatu Adefila concluded her weekend chores at 11 a.m. on February 26, she dashed to Oja Oba, a market newly created by the Olusin of Ijara-Isin, the traditional ruler of her small town in the southern part of Kwara State, North-central Nigeria.
Mrs Adefila's mission was not to buy or sell at the market but to get vouchers usually shared by the king at the market every Saturday.
"Kabiyesi will soon be at the market to distribute money," Ms Adefila said in Igbomina, a Yoruba dialect spoken in parts of Kwara South Senatorial District and Osun State, as she hastily tied her head wrapper, gesturing to the reporter to conclude the questions.
If she gets one, the voucher can buy enough foodstuff for her family for a week.
"You cannot keep or convert the money but use it to buy food and other items at Oja-Oba. Most shops in the village also accept it," she added as she shut the door to her house.
The traditional ruler, Ademola Ajibola, introduced the TLK voucher in August 2021 as a means of exchange within Ijara-Isin.
Some economic experts commended the initiative as a palliative for the economic hardship in Nigeria but others are sceptical about the scheme.
According to the National Bureau of Statistics (NBS), over 91 million persons live in absolute poverty in Nigeria, fueled by a 20 per cent inflation in food prices.
A new king trying to revive a rural economy
Located in Isin Local Government Area in Kwara South Senatorial district, Ijara-Isin has a hilly terrain. And like many rural communities in Nigeria, its economy is based on the incomes of civil servants, healthcare workers and subsistent crop farmers.
In the past decade, farmers in the community have shifted attention to cashew nuts, which seasonal harvest provides them with a temporary windfall. A four-litre bucket of cashew sells for between N3,500 and N4,000.
However, turning farmlands into cashew plantations have pushed up the prices of staple crops in the community, adding to the pains of the biting national food inflation.
Point of Sale (POS) businesses provide access to financial services in Ijara Isin at a cost of about N30 per withdrawal of N1,000. However, POS banking services are limited to the withdrawal, saving and sending of money.
For other commercial banking services, residents have to travel to Omu-Aran, their old provincial headquarters; or Ilorin, the state capital. This is because, in the past few years, incessant robbery attacks have forced commercial banks in Oro, Omu-Aran, Offa and other towns along the Kabba-Ajase-Ipo road to shut down.
Residents have thus been living in harsh conditions in the town but the emergence of a 'billionaire' king has been of tremendous help to the people of Ijara.
Mr Ajibola has been injecting money into the local economy, rehabilitating schools, roads and low-cost houses started by the federal government under the late President Shehu Shagari in the early 1980s but which were never completed.
However, the story of the community is not all about paradise. The traditional stool in the town is the subject of litigation in court, some of the cases lingering for over 30 years. Mr Ajibola is the first from his own section of the town (Ile Olusin). Hence, asking the residents about the currency is met with initial suspicion, until the identity of the reporter is sorted out.
Mr Ajibola's section of the town was banned from the throne in 1911. After years of litigations, in 2014, the late Oba Omoniyi Banigbe, Mr Ajibola's immediate predecessor, and the council of chiefs had an out of court settlement. However, a section of the town, Odo-Ijara, was not satisfied with the settlement and went to court again to challenge the new arrangement.
How the currency works
Mr Ajibola's initiative was inspired by what he saw in the United States in 2021, where vouchers were being used as a means of exchange in some factories, a close aide told PREMIUM TIMES.
He created the voucher system upon his return to Nigeria in August 2021. Earlier, the monarch had converted a part of the moribund Nigerian Postal Service office in the community into a microfinance bank called Ijara-Isin Development Fund Centre (IDFC). The micro-finance bank now issues the vouchers.
Because IDFC does not have the licence to operate as a micro-finance bank, it uses the licence of a micro-finance bank owned by the king, Mount Olive Microfinance Bank, Ilorin.
The monarch declined to speak to PREMIUM TIMES officially. However, this reporter visited the IDFC and met the assistant manager, Yomi Odumade, who revealed the challenge of explaining to the people that the voucher is not money.
Mr Odumade said after Mr Ajibola became king in 2021, he was handing out money to his subjects in the hope that when they spend it in the community, it will have a multiplier effect that will expand the community's economy.
However, the king discovered that instead of spending it on the local economy as he had hoped, many preferred to either save it in their bank accounts or even spend it on goods sold outside the community. To address that, he introduced the voucher.
"When the voucher was introduced, as a worker here, they pay you 50 per cent in naira and 50 per cent in the voucher. That means, you will have to spend 50 per cent of that money here," Mr Odumade said.
Opposition to 'alien currency'
Despite the overwhelming support that the currency enjoys, its use encountered confrontation from internal and external forces.
Shortly after its introduction, Mr Odumade said officers of the Secret Security Service (SSS) visited the bank to make enquiries on the process. According to Mr Odumade, they also invited the king last January.
Despite the enlightenment campaign that the vouchers and not money, some residents remained sceptical for a long time about the scheme.
"We took our time to enlighten the people, but they still call it "Ijara Money" even to the extent that some started saying the end time is coming and the Kabiyesi is trying to replace money (naira). It took people time before accepting the voucher system," he said.
Residents share mixed reactions
To test the initiative, this reporter took advantage of an ongoing discount and converted N4000 notes. I was given N5000 worth of vouchers in N500 denominations at the bank.
The reporter's first purchase was at a grocery store where a woman in her 60s sold a bottle of Coca-Cola to him.
Speaking in Yoruba, the reporter asked the seller, "Ma, do you take this money?" She collected the voucher, examined it carefully and inquired about the bank's signature before issuing a balance of N300.
"They told us in the market that if the voucher is not signed, we should not collect it", she explained after noticing the reporter's curious face, adding that she had to scrutinise the voucher for fear of counterfeit.
The woman, Cecilia Owoeye, said she does not have a bank account, but uses the money for her daily thrift contribution, locally known as 'ajo' or spends it during market days at 'Oja Oba'.
Asked about the impact on her business, she said: "When people come with N2,000 voucher, they spend everything here at once. The king even encouraged us not to give change and they should spend everything."
At another shop in the old market close to the community's Central Mosque, the owner popularly known as 'Iya Ridwan' confirmed that shop owners were initially reluctant to accept the voucher because of the condition of having a bank account. However, general acceptability and its use in the king's market changed their perspective.
"I rarely go to Oja Oba, because I don't have anyone to put in the shop here. So when the king gives the money, I may not benefit. There was a time that the king decided to buy all the wares of the people in the market, his people did not buy from some of us without bank accounts.
"However, because I can use the money to buy rice, semo and other goods at Kabiyesi's store and other distributors in the market, I now collect the money. That will reduce the cost of transporting - I buy at the same rate as those buying from Ilorin or Oro. In addition, the king has vehicles that help in transporting the goods down to our shops at no extra cost", she said.
The market woman showed this reporter some other currencies of the voucher, including the N50,000 denomination which some people had used to buy things in her shop.
On the flip side, she added that some persons bring higher denominations like N10,000 to buy food items and instead of spending all, they insist on buying goods worth N2,000 with the change, and ask for the balance in Nigeria's official currency.
A food seller who refused to disclose her name said a major challenge is the bank's slow deposit of vouchers in their accounts. Because it takes as long as 72 hours to be credited, they prefer to spend the money. The difficulty has, however, not stopped her from collecting the vouchers.
Before leaving the shop, some corps members undergoing their compulsory National Youth Service programme in the community arrived and overheard the conversation. They also shared with the reporter that they receive a monthly stipend of N10,000 from the king - N7000 in the naira notes and the balance in vouchers.
One of the female corps members, who requested anonymity, said initially when they were posted to the community in November 2021, the stipend was shared in halves of both currencies.
She also complained about the delayed process of creating an account even as she battled disregard for the voucher by some service providers in the community.
"Sometimes, they will squeeze their faces, but will still collect the 'money' like that. As for me, I have zero challenge spending the voucher money", she said.
Meanwhile, this reporter used the remaining voucher to buy an earpiece and lunch, paid a bike rider and gifted the rest to a security guard at the Ijara-Isin high school.
Economists disagree over the benefits of voucher
Money is one concept that economists have not been able to agree on a specific definition. However, most have defined it from its function.
Money was invented to eliminate the difficulty associated with trade by the barter system, particularly the principle of double coincidence of wants. That is, a man with a goat, but needs corn, must look for someone who wants the same goat and has the right amount of corn.
To most economists, if an item could serve as a medium of exchange, unit of value, store of value and transfer of value, then it is money. To this end, John Hicks said money is defined by its functions; anything is money that is used as money and money is what money buys.
Over the years, money has evolved, from cowries to gold dust, precious metals and other commodities, to the central bank issued FIAT money and now to crypto-currencies.
Statutorily, the central bank is the only body mandated to issue FIAT money in Nigeria, and like all central banks around the world, the bank guards the responsibility jealously.
Sections 18, 19 and 20 of the CBN Act gives the CBN the power to issue the legal tender, and manage the currency.
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"The currency notes issued by the bank shall be legal tender in Nigeria at their face value for the payment of any amount," section 20(1) reads. The section prohibits anyone or entity from sharing.
Paul Alaje, an economist, said the system developed by the community has not violated any extant law, simply because the 'voucher' is not money, but near money used at a micro-level without any compulsion from the king on the community.
According to Mr Alaje, the voucher system, which is pegged to the naira, is not displacing the naira. Rather, it is a means of facilitating trade within the economy. He, however, warned that sustainability is a doubt because everything about the system is connected to the king.
"The bank has no board to regulate the amount of "vouchers' being printed by the king. The danger comes when there is no sufficient money to back the vouchers issues.
"It is not sustainable in the long run, because that money is not really backed by anything. There is no board to determine how much the man can actually print. You cannot print more than what you really have," he said.
A similar view was expressed by Femi Shuaib, a professor of Economics at the University of Lagos, who said the initiative is laudable as long as the king is not compelling his subjects to use the voucher to create any means to inflate the prices of goods in his shops.
Mr Shuaib, however, warned that the danger with the currency is overproduction, which he said could be addressed through close monitoring by the financial regulatory authority before it becomes a Ponzi scheme.
"The CBN needs to be interested in that community, and see if it is a model that can be replicated in other communities across the country. To guard against manipulation, all the money should go through the microfinance bank and not through the palace. The CBN should be able to know how much is being converted.
"The security of that money is important, because if the people of the community should hold their wealth in the voucher and the system collapses, then it can create serious problems for the members of the community."
He further cautioned that the success of the initiative could encourage separatist movements in some parts of the country to introduce their money and force the people to adopt such currencies.
Non-existing local government system
The poor performance of the local government system due to the lack of financial autonomy has created a vacuum in governance. To address this, many communities in Nigeria now prefer well-to-do individuals like the king to invest in the communities.
For that reason, several communities in Nigeria now install rich people as kings.
For the people of Ijara-Isin, the selection of a rich king appears to be paying off.
