Traders in the North East geopolitical zone of the country have said that the increasing amount of mutilated banknotes in circulation is hindering small business transactions in the zone.
Petty traders and their customers often apportion blames, with the situation straining business relationships.
Our correspondents, who visited the capitals of Borno, Yobe, Bauchi and Taraba states, report that mutilated banknotes are a common sight in the streets and business environments, particularly among those selling water, kola nuts, vegetables and other edibles.
The overused notes, especially N10, N20, N50, N100 and N200, are weak to such an extent that they tear during transactions.
Some of the petty traders, who spoke to our correspondent, expressed grievances over the situation.
One of them, Maina Adam Konto, who sells vegetables at Monday Market in Maiduguri, said the frustration of dealing with damaged naira notes was more challenging than the business itself.
"The number of damaged notes in circulation is too much; sometimes, you will find yourself quarreling with customers over such notes.
"They will argue that it is a legal tender, that they didn't print it; so, you must not reject it. And the same customers will refuse another damaged note, telling you that they are not in a good condition.
"Most times, the colour of the polymer has faded such that you cannot differentiate between N20 and N50," he said.
Konto lamented that the damaged notes always took away a reasonable part of his profits, making it difficult to feed his family.
Aliyu Musa, another trader in Maiduguri, said it was after the introduction of new banknotes that the petty traders, who mostly transact in lower notes, started experiencing the problem.
"When the new notes were introduced, N500 and N1,000 became scarce and more pressure was put on lower denominations like N10, N20, N50 and N100 due to availability.
"And now, we have scarcity of the lower denominations, and the majority of the available ones are mostly damaged," he said.
Musa appealed to the federal government to print enough notes of good quality that could withstand the weather for smooth business transactions in the country.
Mutilated notes eat up our profits - Traders
Muhammadu Lawan, a kola nut seller in Jalingo, Taraba State, also complained about how mutilated currency notes affect his daily transactions.
He said prices of kola nuts and cigarettes had gone very high, but the value of the naira kept dropping, adding that damaged naira notes exacerbated the situation.
"The naira notes are so weak that you will not know what to do with the money you collected. This is giving every trader you see here worries.
"Some of the wholesalers we buy goods from are rejecting the money. Our capital is very little. Many people gave up business because it ate up their capital," he said.
Muhammad Goni, a Keke NAPEP rider in Maiduguri, said, "Before now, we relied on filling stations to spend such money, but fuel attendants are now rejecting them. So, it is better not to pick a passenger and collect such notes."
He said printing new lower denominations like N10, N20, N50 and N100 would solve the transaction problems and save traders from avoidable losses.
Badaru Malum, a fruit seller in Damaturu, Yobe State, said his capital was not more than N20,000; but on the average, he recorded at least N3,000 of damaged currency notes every day.
He said he always returned home with at least N2,000 of rejected naira notes by fruit dealers whenever he went to supply them.
"Once you go to them, the dealers would separate the damaged notes and return them to you. Some would just pity me and collect part of the damaged notes. But at the end of the day, it is me that bear the loss.
"Remember, our profit is not more than N3,000 a day. So, when you consider the amount I forgo, I will be left with almost nothing to take home," he said.
A roadside sweet potato trader in Azare, Bauchi State, Haruna Baba Usman, wondered why the Central Bank of Nigeria (CBN) could not mop up mutilated currency notes in circulation.
"It is like nobody cares about us anymore. For a very long time, these mutilated notes have been in circulation and the government knows about it. Why can't they print new ones?
"Besides, the money goes in and out of banks daily, but they don't want to mop them out of circulation and it is small businesses that suffer," he said.
Customers ask CBN to mop up dirty notes
Customers, who spoke to our reporter, called on the CBN to mop up mutilated currency notes from circulation.
They also alleged that traders were in the habit of mishandling currency notes.
One of them, Inusa Hassan, said "no matter how minted a naira note looks", the traders would squeeze it.
"That is the first stage of disfiguring the bank notes. And some notes are easily forgotten in the pockets and washed, and they end up getting ruined," he said.
He alleged that the CBN has failed in its mandate to safeguard the naira in terms of value and quality.
"Believe me, some of the N100 notes in circulation are patched with pieces of brown papers. I wonder why the government should allow this kind of thing to happen. It is an embarrassment to Nigeria as a country," he said.
Poor storage affects money quality - Banker
An official of one of the first generation banks, who pleaded not to be named, blamed poor storage and handling of the bank notes for mutilation.
He said the bank on Friday received about N15 million of lower denominations from a customer.
"We could not reject the money, but it is very dirty and delicate to count. We only rejected those with missing parts or without serial numbers. Most of our staff don't want to count such money because of infection," he said.
He revealed that for a long time, the CBN had not released certain denominations to his bank.
"For a very long time, we have not been receiving N100 notes from the CBN. We receive N1,000, N500 and N200. The CBN gives us minted N50, N20 and N10, but these are not sufficient," he said.
On the weak quality of the naira notes, he said: "I always argue that the quality is relatively okay, but our money is being handled carelessly without penalty.
"Since October 2022 when the new banknotes were introduced and the subsequent cash crunch in the country, many people stockpiled cash in nylons underground. This poor storage has affected the colour and quality of the notes," he said.
CBN's directives on mutilated notes
It would be recalled that in an effort to improve the quality of the naira notes, in August 2019, the CBN had directed Nigerians to deposit mutilated notes in any bank branch closer to them.
The directive was contained in an email message sent by the Guaranty Trust Bank to its customers and was reported by the media.
"As part of efforts to improve the overall quality of the naira in circulation, the CBN introduced the Clean Note Policy and Banknotes Fitness Guidelines.
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"If you have overused or mutilated naira notes in your possession, you are required by the CBN Clean Note Policy to deposit them at any bank branch near you, on or before Monday, September 2, 2019.
"Please, note that overused notes include any naira note that is now weak, to such an extent that it could easily tear at further handling.
"Mutilated notes include any currency that has been partially or permanently damaged, but which clearly still has more than half of its original size together," the message had read.
Worried by the increasing amount of mutilated banknotes deposited with the CBN, the apex bank, in a circular titled 'Treatment of Composed Banknotes', issued to all deposit money banks on March 31, 2022, had directed them to stop including composed currency notes in their deposits or risk paying a penalty of 400 percent of the value of the banknotes.
Composed banknotes are mutilated currency notes comprising several parts of different banknotes of the same denomination.
"The management of the CBN observed with concern the increasing number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public.
"The existence of composed banknotes in the economy falsifies the true value of the currency in circulation, and can also be an avenue for fraudulent activities.
"Consequently, any composed banknote discovered in the deposit of DMBs shall attract a penalty of 400 per cent of the value," the circular partly read.
Efforts by Daily Trust on Sunday to know the CBN's next line of action were to no avail as its Ag. Director of Corporate Communications, Mrs Hakama Sidi Ali, neither answered phone calls nor replied messages sent to her yesterday.
