The Economic Effect of ‘I-No-Get-Change’

As I boarded a bus to work last week, the driver announced that he didn’t have any change for anyone with N500 and more, so he expected everyone had the right amount: N50. The woman beside me promptly got up and left the bus. I presume she didn’t have any smaller denomination either. Since I moved to Lagos, I’ve taken into cognizance the effect of not having ‘change’ on transactions. Although it might seem unremarkable, the issue of ‘change’ significantly affects the success rate of a myriad of transactions; especially those at Small and Medium Enterprise levels. Might I be exaggerating the effects? No. Not when one aggregates these effects to a macro-level. Let’s get to these effects.


First, as illustrated by my anecdote, the issue of finding ‘change’ creates a wedge in business transactions. It halts the exchange of goods and services. The seller’s willing to supply the commodity, the buyer’s also willing and able to purchase, but the deal never goes through…cause no one’s got change. To illustrate the net effect of this scenario, I’ll use some simple demand and supply curves.

Diagram 1

Photo 1-19-14, 11 43 34 AM (1)

For those who have no idea how this diagram helps illustrate anything, I’ll explain. Our supply curve (S) is horizontal because no matter how much demand shifts, the supply isn’t going to drastically change. The bus driver will still have a set number of seats irrespective of the demand; the groundnut (peanut) seller will still have one tray of groundnut to sell and the ‘pure water’ guy will still have a bag of water to sell. The demand involuntarily falls from D to D1 because some of the buyers can’t pay for the products with their N1000 or N500 notes. Consequently, the quantity of goods sold falls from q to q1. The shaded region indicates the seller’s lost profit. That’s never a good thing.

Interestingly enough, the issue of change might have a smaller counter-effect of increasing the exchange of goods and services. In scenarios of ‘change deficiency’, people end up buying more than they originally planned to. Most of us have experienced cases where we have to buy another bottle of coke or plate of rice because the seller didn’t have change. In spite of this counter-effect, the aggregate net-effect would still be a reduction in commercial activity.

Moreover, buying more than one bargained for also constitutes waste and misappropriation of scarce resources. It might mean reallocating money to less useful goods. Moreover, buying a N300 plate of rice when your appetite-capacity is N100 constitutes a reduction in utility. After the 100 Naira point of satisfaction, one’s marginal utility of rice plunges to zero. As he forces himself to finish the large 300 Naira plate of rice he unwillingly purchased, his utility takes on a negative value. Every spoon of rice he shoves into his mouth is no longer rewarding, but rather feels like a punishment. I can’t count how many times I’ve been in such a situation.

Also, you lose money when you decided to leave the remaining ‘change’ with the corn seller or taxi driver. Some of us don’t mind, but frankly, a lot of us do. Having no spare change on you gets incredibly expensive when you run into those pesky Abuja policemen who cajole you to ‘betta’ their night…and all you’ve got is a N1000 note.

I won’t even delve into the issue of time wasted when the seller’s trying to find change and you’ve just got to wait and wait…for N200. The time spent looking for change, you could be somewhere else doing something more productive and the seller could be selling another of his/her product to someone else.

Pseudo-Philosophical Implication? 

The issue of change also raises a pseudo-philosophical question. Does money retain its value all the time or could less money in smaller denominations be more valuable than more money in larger denominations?  Most of us have been in situations where we’d prefer to have N100 than the N500 currently in our possession, simply cause there’ll be change with the lower denomination. At that point in time, N100 is more valuable than N500.

This might seem obvious, but money only holds value if it can be spent. For example, it’s like holding a legitimate form of currency in a different country. In spite of how internationally recognized the Dollar is, it can’t be used to buy ‘Suya’ from the Mallam at the street side. To get its true value within that context, one would need to convert it to Naira: same with the issue of change. No matter how valuable or recognized your N1000 is, if you plan on buying ‘pure water’ from a street vendor, you need to either change it to lower denominations or hope he has change and is willing to part with it.

Such emphasis on holding change explains why sellers and buyers jealously hoard their N50 and N100 notes. Ironically, such behavior reduces the amount of small denominations in circulation and only worsens the situation.


Fear not, a market solution might exist. One could create a market that corrects for this wedge in transaction and simultaneously creates revenue, i.e. a derivative of a currency-exchange market where conversion of foreign currency to domestic currency is based on a certain rate. When converting money, the money changer charges you for his service. He’s converting your legitimate, but useless money into legitimate and useful domestic currency. Likewise one could charge for changing high denominations to smaller denominations. Perhaps, charge N20 for every N500 converted? I’ll leave the entrepreneurially-minded to take care of the logistics or feasibility of such a market. Wait…or maybe the Government should just print smaller denominations in place of the larger ones. Or if only mobile money here had Kenya’s success rate. On the bright side, pause for a second and imagine how much worse the ‘change’ situation would have been if the plans for N5000 notes went through.

Am I the only one who finds the issue of ‘change’ really stressful or is it all in my head? Or perhaps I need to get richer, so I’ll be able to make obnoxiously cool ‘rich people’ remarks like “Keep the Change”. Let me know what you think in the comments.

  • Lol. ‘Cool rich people remarks like “keep the change?”‘ Smh
    I find the no change issue pretty stressful too. I’m pretty good at bullying Abuja cab drivers but a number of times, I’ve had to pay more than I bargained for. I’ve also had to take a drop to work sometimes, spending more than twice the usual amount because I didn’t have change. It’s pretty frustrating.
    I agree that government should print smaller denominations. That way, we might not have serious change issues. But I do think that if that is done, market prices might also drop considerably. Don’t know so much about econ anyway so I’m not sure.
    Anyways, this was a good read. Good to have you back here

    • Thanks. Prices are ‘sticky-downwards’, so it’s unlikely it’ll help reduce prices. Might help reduce the rate at which they go up though. And cheers, it’s good to be back.

  • Quite an interesting write-up, but I would have you suggest more enlightenment of the mobile money platform. Almost every body, including the groundnut seller or “pure water” hawker have access to a mobile phone, so one can easily just save the hurdles and time in looking for change and conclude monetary transactions with ease and speed. Although, its effectiveness and efficiency might be called to question, including its security but it remains a safe choice for now, if transactions must go on unabated.

    • Thanks. Mobile money’s actually more complicated than it seems. This article explains more on why it’s been difficult to go mainstream in Nigeria as well as other countries:

      • Ayo

        This is simply outstanding. You have put everything in proper perspective chuba and i wish someone smart enough would take a right step in the right direction to change this ‘CHANGE’ kpalaver. More oil to your hands brother. I hope i am able to put a voice to this write-ups soon

    • Azeke TA

      i really think cashless economy will take care of this problem.

  • Real issue this.

    There have been situations where i have avoided entering a bus for N70 only to enter the one behind it for N100, why? I am more comfortable paying for a more expensive service, than to have to forgo my change…or worse, waste time waiting for bus conductor to look for change, or worse still, ‘joining’ me with another passenger! Penny wise, right?

    There is also the potential permanent loss of business patronage in some situations. An eatery close to my office had to shut down for lack of patronage. A lot of customers quietly sought alternatives after incessant ‘no change’ experiences at the eatery.

  • This is dense. The math and stuff…geesh.
    But yeah. The I no get change is super annoying. I now ask taxi drivers if they have change before I enter. And I’m more than happy to walk away from buying that morsel of bread if you ain’t got the right change. I reason, hey, I shouldn’t even be eating that candy/ sweet bread anyway, so I’m glad they don’t have change. Lately, I’ve started telling the clerk, hey if you don’t have the N20 change, then I’m giving you what I have. Surprisingly, they’re accepting! This happened twice so far, at a fancy Chinese restaurant– they were willing to forgo the change they owed me. So I ended up paying like N20 less than the cost.
    Lesson: If you’re running a business, or providing a service, you need to have change AKA petty cash!

  • joy

    interesting and enlightening read. people already charge for changing larger denominations to smaller ones. at weddings, some ‘money changers’ collect as much as 100 per 1000 naira! also I have witnessed people buying change from street beggars. is this a sustainable solution though? I would rather get extra goods or service for the extra money spent buying change.

    • yes Joy you are right, there is indeed a market already for the smaller note denominations like 20 and 50 naira, but it seems only add to the problem; as it creates an incentive for smaller denominations to be channeled to this (black) market, ; making it scarce and not readily available for everyday transactions.

  • Okwy Okeke

    Detailed analysis, then the net macroeconomic impact may be nil, why? The lady that stepped out of the bus you were in probably joined that right behind, she didn’t walk, did she? Aggregate demand probably did not change. Second, after N100 rice, your utility may drop, did not necessarily fall to zero or become negative. To become negative would mean you probably fell ill and had to spend money to be whole again. On solutions, mobile money could work if you look to Squares and similar solutions which are basically small and cellphones compatible POS machines. An ambitious bank can give out these devices for free as the case is in some economies, then rely on the float and COT charges for margin rather than fees.

    The most exciting bit for me is your conscientiousness at putting to paper a societal issue. Way to go, and by the way, you appear much more entrepreneurial than Steve Jobs

    • Haha. Yeah. You have a point, but other factors are unaccounted for. In this case, buses were hardly coming at this time, so she would have had to wait for the next 15-20 minutes to get the next one. That’s a waste of time, which also means she gets to her destination later than expected. Also, my utility(given that’s it a normative metric) is negative. I’m conscious of how much I eat in an attempt to stay healthy (and not feel sleepy at work). So these are indeed valid concerns. And you’re right about mobile money. Regulations is a difficult hurdle they’d have to jump through though. Thanks a lot for reading and thanks for the compliment.

  • Ahmad Saleh

    Dude! Awesome! this article has really “changed” my life.

  • Princess

    Is so great a thing is not also just in my head. Just yesterday I had to go beyond my highlighing bus-stop because I didn’t have change so the driver could buy something and make change, I’d prefer an outlet where even to the very average seller, can comfortably walk into in the morning to change their #1000 & #500 before heading out for the day’s business. It will make life a whole lot easier. Great article!

  • G

    The ” change ” issue is been attributed to the use of ATM, the machines dispenses N1,000 and N500, making lower denominations difficult and hard to circulate. If everybody keeps on picking 1000 and 500 from the machines, where do u expect to get the small denomination for change? Just my thought anyway.

  • Kajogbola

    Thats always d case most times,as one struggle to get change and eventually endin up buyin or spendin more than necessary. Good one!

  • bibi

    This article is soooo true! The change situation is terrible n it seems atyms sum retailers purposely dont hv change so u can forfeit your 20 or 50 naira,and atyms even embarass u for demanding for change in restaurants or supermarkets. I hear theres a plan to re introduce d 5000naira note again?

  • Anonymous


  • @stevearaba

    You have made a valid intelligent point about the i-no-get-change syndrome and the massive value lost and money convertible time that has been lost for a long period now. Apparently, it may take some huge education for the leaders to understand the principles of cause-and-effect, as against activity of polity, rather than effectiveness in leadership.
    Very well thought out… Makes me imagine if the BRT ticketing system can be applied to other transport module like they have it in most of Europe and then worry about other forms of service as time goes on.

  • Iheanacho

    Chuba this is quite an issue you’ve raised.
    I can assure you its not just in your head alone, its all in our heads!
    But luckily for us its not rocket science. We can fix this. Why because we created it in the first instance. The CBN in such a haste to go cashless made a lot of hasty decisions. Thank God we fought the 5k note thing off else we won’t be talking just “I No get change”
    Our ATMs must now start dispensing lower denominations. We must now have choice as to what denomination to be paid with be it in the banking halls or at the ATMs.
    Another solution is the mobile money where we can be paid to the last kobo but as we’ve seen with the cashless policy, we’re a long from there.
    Nice piece Chuba

  • Kuti Malik

    You’re very right bro, the I-no-get-change situation often causes the price of some commodities and services to round-up thereby making it more expensive.
    You know I also get to to plan for change against the following day (mornings esp) so you don’t miss a service (bus ride especially).
    I hope the CBN takes note and consequently print more lesser denominations (5, 10, 20, 50 & 100 naira notes).

  • jane

    Wonderful article… I’ve been in this situation on several occasions of late, today been the worst of it. We need smaller denomination to be in circulation, because as you rightly pointed out, the “I-No-Get-Change” is a great hindrance in our everyday transaction.

  • Great write-up! The change wahala is a serious one but I think I have found the way out: ‘the challenge of change’

  • These are more reasons why most of our low price goods don’t increase proportionally. imagine a satchet of pure water with a Cost Price of N4 was sold N5. if the CP increases to N5.50, the SP unproportionally increases to N10. all theses is as a result of no change. this is same for cases like our little sweet, biscuit and what Mallam sule sells. It further escalates to other goods.
    Nobody wants to use coins, neither are the companies ready to tempt the populace to use coin. we watch foreign movies daily and we see how a coin could get you a cup of cold drink or candy.
    in all, good perspective, good write, more solutions.

    • Chibuike

      Pretty interesting! Guess who profit from all of these irregular pricings as a result of the ‘no change’ attitude…The elite thieves! Who suffers? Meager earning ‘me’ n ‘you’! God help us.

  • According to CBN last year, the polythene material for the lower denominations is bad, they have stopped producing those currency as at last year I believe. And they are to revert back to Paper currency this year. This explains the reason for the scarcity of change. Did you miss that news or was I the only one who saw it? Check CBN’s website for the proposed currencies. I saw something like that some days ago.

    • Yes, but the CBN does not revert in such a manner. It doesn’t simply remove money without replacing it. The issue of change has existed years before the notes were changed to their current form. Cheers.

  • Kunle O

    Fascinating read. One of the biggest culprits for no-change is the airport trolley vendors at MM Airport. I do feel angry ….I would willingly pay N700 if service were priced at that level than to be told service was N560 (and no change repeatedly)! Note the awkward combination N50 and N10.…

    • Your post captures the issue peytceflr!

  • mmb

    Nice piece

  • Tarex

    Nice write-up….You are not the only one who’s tired of this “no change wahala”…The most annoying part is, some of these sellers and keke marua guys now expect you to leave the change..and they say things like, “so you no fit dash person money?” I just don’t get…why a business man or woman wouldn’t make an effort to have change readily available when they know they need it…I once went to a bakery to get freshly made bread and i was told there was no change- I just told them, ” I left work so tired, went past my house,another bakery and other shops they sell bread, made it to this bakery and you tell me there’s no change and so you won’t sell?…I won’t take that..I need bread and I need change”… can imagine how i must have felt. Guess what?…. i got my 750 change )the bread goes for 250 and i had a thousand bucks with me)…

  • Aliyu

    This certainly applicable to most people with all or even more of ripple effects. The entrepreneurial option suggested, though good at the but might become a very big problem in future. I think the CBN should just make smaller denominations available to ease life for the populace.

  • CaesarBoris

    The simple solution which will favour everyone, both poor and rich, is to direct the banks to issue 0.1percent of all withdrawals below 1million in polymer notes. Though it has some disadvantages, it solves this problem.


  • CaesarBoris

    A simple solution which would favor both the rich and poor is to direct all banks to issue 0.1percent of all withdrawals below 1million in polymer notes. This might help. The ATMs should also be made by relevant authorities to issue coins and polmer notes.
    Are these far-fetched?


  • Oby

    This is exceptionally brilliant considering your status as a Nigerian. You go deep, touching every necessary point. The article is almost too good to be true and I don’t see any harm in this coming out in a national newspaper! I feel its past time and this ought to go viral but I fear it won’t be taken up or seriously as we dwell in a highly political nation. This is not an issue which can change in a day. Only the person wearing the shoe knows where it hurts the other person can only say sorry and offer a pair of slippers, but of does not change the fact that the next time one needs to wear those shoes it won’t still hurt. If our leaders could experience it first hand, there would definitely be a change. But till then this might be a sad way we would continue living our lives. However, when talking about the Pseudo-Philosophical Implication, your second paragraph begins with “This might seem obvious”. I feel the right word should have been “oblivious” rather than “obvious”.

    • Haha. Cheers. And yeah, I did mean ‘obvious’ cause I assume people only see value in money if they realize it can be spent. I wouldn’t see any value in Zimbabwean dollars even if it had 1 mil dollars written on it…cause I can’t spend it anyways. Thanks for your comment!

  • Ashama

    Lovely piece. The economic effect part really resonated with me. Happened to me several times. From the time wasting aspect to the zero utility part.

  • Abdallah

    This is an interesting piece, I must say. I’m fascinated at how you explain almost everything through the language of economics! What’s your qualification? And what college did you go to? If I may ask. I’m an annoyingly curious teen tbh lol

  • clement

    I think the Cashless economy will take care of this. You wouldn’t need change while using a POS and our little N1 and 50kobos here and there in Shoprite and co won’t be forcefully extorted

  • clement

    I think the Cashless economy will take care of this. You wouldn’t need change while using a POS and our little N1 and 50kobos here and there in Shoprite and co won’t be forcefully withheld.

  • Pingback: How the "I no get change" syndrome may be ruining our economy » Muyo-san's Blog()

  • Urgh! You beat me to this issue, wanted to blog about small change but You have done a great job on the issue already.
    Actually it feels like the ‘change’ is reducing in circulation, it seems like everyone is seeking for an opportunity to hoard change.
    Some would say it’s because Nigerians don’t tip that we find this change issue a problem, my advice is; if you are ever in need of change, Ask a street beggar!

    P.S: moved to Lagos? Isn’t that like frypan to fire? You may have to edit your ‘taxi driver’ article or write a new one. 🙂

    • Haha. Yeah. I was ignorant. Taxis in Abuja are exceedingly cheap. Lagos is on a different level entirely!

  • Reblogged this on Flight of the Phoenix.

  • Sally

    Very spot on.

    Leaving your change even if you feel you don’t need isn’t a very wise decision either because if you think of it in aggregate terms, calculate how much change you will have left at the end of the month. N50 here, N20 there. At the end of the month you could be looking at a whole N5000 unaccounted for.

    Having larger denominations has always been a way to stop me from spending,sort of how I would hold some money in Naira if I went to Togo.

    One point you didn’t quite explore is the fact that it gradually increases price of certain commodities. For example bus drivers would rather bus fares were N50 or N100 than N70 or N80 or even N90. Anyway it just shows the practicality of larger denominations in circulation, leading to inflation.

  • richard

    The issue of no change is more a matter of the vendor hoping you will just ignore the fact that they don’t have change and dash them the change… the amount if times this has happened to me is staggering… and most times I would be more then happy to dash them but I dont want to be forced into it… it happened to me at KFC at MM2 my change was 400 and the girl claimed no change… I asked one of the managers and he opened the cash register and there was a whole stack of 200 notes… it seems most vendors bank on people preferring to dash the change then wait for them to find it…

  • Questo è il blog ideale per tutti coloro che
    desiderano scoprire su questo argomento . Sai così tanto la
    sua quasi difficile discutere con te ( non che io
    davvero vorrei … haha) . Certamente messo una
    nuova rotazione su un argomento che è stato discusso per
    anni . Great stuff , semplicemente meraviglioso !

  • This is best described as an exposee on current situations. Like a friend of mine would always say: Na change matter go cause world war 4, cos we go just skip world war 3!. The economics is very simple, but, as with everything nomics, there’s a gainer and a loser. Also other factors are also of essence: time and utility.
    Boss… you don’t need anyone reminding you that you are good at what you do, buh, Baba you good! You actually dey pen wetin most of us dey discuss verbally.
    Tuaalee for Boss!

  • Excellent piece you have here, however your solution is already available on the black market, parties, bus stops etc. Perhaps the government should legalize and control costs of changing higher to smaller denominations.