Vanishing legal tender: Sad fall of N5, N10, N20 notes

The once practical N5, N10 and N20 banknotes are gradually losing their relevance in Nigeria's economy as inflation has steadily reduced their purchasing power. At a roadside provision shop in Lagos, a trader named Iya Aliyah expressed her disbelief when asked to change N10, stating that no items in her shop could be purchased for that amount.

This sentiment echoed across markets, kiosks and motor parks, where traders found it increasingly difficult to identify items that could be bought with the smaller notes. The declining purchasing power of the N5, N10 and N20 notes is particularly evident in Lagos, where commuters, workers and traders rely on these denominations for petty transactions.

In a field exercise conducted across selected locations in the city, traders, transport workers, POS operators and consumers were asked to identify the cheapest item available for N5, N10 and N20. The results revealed a dramatic shift in the meaning of "small money," with many traders no longer accepting the small denominations.

Transport fares have also risen, pushing small notes further out of everyday transactions. For instance, the least fare for a commercial tricycle in Lagos is now N100, up from N100 last year due to the increase in petrol prices. Similarly, a commercial bus driver noted that while the fare to Maryland from Ojota costs N300, any drop along the route costs N200.

Despite the scarcity of small denominations in these transactions, some businesses, such as supermarkets, continue to accept them for purchases. However, at these establishments, the scarcity of small notes sometimes creates bottlenecks as customers insist on getting their change.