SEGUN ODUNAYO writes on Ijara-Isin, a small community in Kwara State, which has its unique means of buying and selling
Ijara-Isin is a sleepy small community in Isin Local Government Area of Kwara State, North-Central, Nigeria.
The villagers are quiet people who go about their business peacefully.
Many of the indigenes are farmers and petty traders, who sell at the popular Oja-Oba Market (the king’s market).
During a visit to the community market, our correspondent observed as customers offered in exchange for goods what appeared like vouchers.
The notes are very popular among the market men and women and are in different denominations – 100, 200, 500, 5,000, 10,000 – which determine their values.
The coloured papers are said to be recognised and accepted for goods and services in the community. While traders accept the naira as a means of exchange, they also accept the vouchers.
The voucher system
Saturday PUNCH gathered that the voucher system was introduced in 2021 shortly after a new traditional ruler, Oba Ajibola Ademola, emerged in the community.
A trader, Omolara Babalola, said the voucher had greatly improved business transactions in the village.
She said, “Oba Ademola created this so that we can make more sales in this market. The voucher isn’t available in any other city except here. It is acceptable in this market and has improved our sales because it helps our people spend their money in the community rather than taking it outside.”
The Managing Director of Ijara-Isin Development Fund and Corporative, Oluwafemi Alo, said the traditional ruler got the initiative after a trip to the United States of America.
Alo said, “He visited America in 2021 and saw how some factories used vouchers as a means of exchange to keep money circulating within their community, thereby bringing growth to their people.
“After he became king, he implemented a similar scheme here. He noticed that whenever he gave out jobs in the community, artisans and those who worked for him took all the cash outside the community, which did not impact the community positively. So, when he gives out jobs now, he pays a certain percentage in naira and issues out the rest in our local vouchers.
“Most of our market women collect both vouchers and cash. Whenever they collect vouchers, they come to the Ijara-Isin Development Fund and Corporative office to save them in their accounts, where we convert the vouchers to cash for them so that they can restock.”
The IDFC manages the voucher system in the community.
According to Alo, all printed vouchers have serial numbers, which are always captured at their backend server.
A cash officer with the IDFC, Mukaila Abdulrahman, said he signed on every voucher brought to the market, adding that it was part of the process of authenticating them.
He said, “One can buy goods worth thousands of naira here in the market with the vouchers and the market women will come to our office to change them. We have workers there who help them change the vouchers to cash. I am always here in the market to sign and stamp every voucher.”
A trader, Omolara Babalola, said the initiative had reduced theft in the community.
She said, “The voucher is a protective measure against thefts because it is useless to whoever snatches it from us. If you steal it from us, you can’t go to IDFC to exchange it for cash; you’d be caught. Therefore, we can remain in the market till as late as 8pm and no robber can come to attack us because the voucher is useless to them.”
A community official, Akinleye Tolulope, said he worked directly with the king and got paid in both vouchers and cash.
He said, “This initiative is to build the economic system here. Most of us working with the king get paid 60/40 or 70/30 per cent in the ratio of vouchers to cash. The larger portion is paid via voucher, while the rest is paid in naira.
“I don’t live in the community but since I get paid in vouchers, I’d have to patronise their market and buy things I need to take home.”
A cash officer with IDFC, Mukaila Abdulrahman, said thefts of the vouchers could easily be detected and traced.
“For example, if Mogaji Soliu misplaces them and reports at our office if someone brings them to us, we can trace the vouchers through the serial numbers in our records. If anyone presents the same voucher, we will challenge him to know who gave it to him and apprehend the culprit,” he added.
Voucher vs naira
Just as the Central Bank of Nigeria prints the naira, the voucher is administered by the Ijara-Isin Development Funds Corporative.
Also, while all naira notes are signed by the governor of the CBN, the Ijara-Isin ‘currency’ must be signed by the cash officer or account officer as he is known.
However, only three persons have the right to issue the voucher: the king, the managing director and the account officer of the IDFC.
As naira circulates across the country, the voucher travels from the palace (or the IDFC office as the case may be) to villagers, from where it circulates to market women and to the ‘bank’ (IDFC office).
The IDFC managing director said vouchers could be got as a reward for work done, thus becoming payment or received as a gift for an action embarked upon.
A resident, Olaleye Olatayo, said he first got the voucher when his football team won an intra-community tournament and they were gifted vouchers.
“We got vouchers worth thousands of naira as gifts from the king on that day,” he added.
Like Tenino, Marica, like Ijara-Isin
Findings by our correspondent showed that the practice in Ijara Isin is not new.
In Tenino, Washington, USA, the system was practised to keep the most vulnerable from falling through the national currency’s cracks.
The concept helped residents scale through the Depression of the 1930s.
People, who were classified as poor, were entitled to $300 of the town’s currency per week.
They were allowed to spend the currency at the value of the dollar in supermarkets and local businesses and circulate them back into the economy.
In Marica, Brazil, about half of the population receive $35 monthly in mumbuca (the currency of the city).
Businesses pay a two per cent fee to accept mumbuca to access the customer base.
The fees are then used to fund no interest loans for local homeowners and entrepreneurs.
This was used in overcoming the crisis for the thousands of Marica residents during the COVID-19 pandemic.
A researcher, Dr Gill Sefyang, said community currencies could be laced with various value systems and motivations which could be used to reward work, time and skills.
She explained that community currencies could take several forms, but they ultimately enabled residents to trade goods and services without the need for scarce cash.
However, a resident of Ijara Isin, who spoke on condition of anonymity, said some officials of the Department of State Services visited the community last year to investigate the system.
He noted that some members of the community were interrogated.
“At a point, they even invited our king to question him and there was panic everywhere. It made us all scared of making use of vouchers but we continued after the whole issue died down,” he added.
Efforts to speak to Oba Ademola proved abortive as he declined enquiries from our correspondent.
Legality of system
Sections 18, 19 and 20 of the Central Bank of Nigeria Act gave the apex bank the authority to issue legal tender and manage currency issues.
Section 20 (1) read, “The currency notes issued by the bank shall be legal tender in Nigeria at their face value for the payment of any amount.”
The section prohibits anyone or entity from sharing such duties.
However, the Chief Executive Officer of Cowry Asset Management, Johnson Chukwu, said there was nothing illegal in the voucher system.
He said, “Several kinds of money are being used globally as legal tender. For instance, cryptocurrency is money. Inasmuch as it’s not legal tender but as much as it is being accepted, it is money.
“What they’re doing in that community (Ijara-Isin) isn’t illegal in itself. You can have a group of persons who can use anything as a medium of payment within their circle, yet, it doesn’t negate the legal tender status of the naira. And since they still accept naira in their community, it’s an interesting thing, which is worth studying.
“If you go to some clubs, they’d give you a token and it becomes a medium of payment. Within that club, that token is money.”
Chukwu, however, stated that the system could not impact positively on economic development.
“That is because development is where there’s investment, job creation and creativity and productivity. It’s not a medium of exchange or currency that brings development,” he added.
According to a Senior Advocate of Nigeria, Rasheed Adegoke, the use of vouchers is legal despite the matters of currency being exclusive to the CBN.
He said, “The usage of vouchers can’t be said to have contravened the law. For instance, if you go to some organisations like Nestle, they do make provisions for their staff just like in the university those days when they give vouchers to students. The value of the voucher in that community is equal to the naira.
“Therefore, in my perspective, since the commercial transaction value is the same, I don’t think it has violated any law and I think kudos should be given to the people of Ijara-Isin and their monarch for the thinking of what can make life easier for their people. When their people buy goods outside of their community, they still use naira and they also accept naira within their community.”
Another legal luminary, Lekan Ojo (SAN), shared a similar opinion on the matter.
He said, “This community has never said their voucher is legal tender in Nigeria. They have only determined among themselves to accept it as a means of conducting commercial transactions within that community. In the past and even till date, some transactions can be conducted via vouchers.
“For example, if you want to buy a bus ticket, you buy a voucher and the bus company will accept the voucher depending on its value. The voucher isn’t a legal tender, nevertheless, it can be used to carry out a commercial transaction for which it was generated and there won’t be anything illegal in that.
“Some transactions are conducted via gold. There was a time when Nigeria used crude oil to pay for some things to other countries; it didn’t make crude oil legal tender, yet it was more or less cash. If those people say they accept vouchers for the conduct of commercial transactions, I don’t see the law they’ve violated. It’s a different thing if you go there to spend naira and they reject it, then it becomes a problem.”
But a tax expert, Mr Bala Zakka, said the system was illegal.
He said, “A legal tender is a currency that is legally recognised in a given region, country or continent; it is seen as a legitimate means of exchange. It could be in the form of notes, coins or federal reserves. There used to be trade by barter where exchange happens with goods or materials.
“However, a voucher must never be allowed to be a legal tender neither should it exist side-by-side with the legal tender in Nigeria except it is backed up by law. And if it isn’t backed up by law, regardless of how convenient it might be, it is illegal and shouldn’t be promoted.”
“While it is good to encourage relationships, people need to be very careful. They can approach the law or authorities for approval if it is for their convenience so as not to be against the laws of the land.”