It was my first time eating grilled fish with my hands, but it was absolutely delicious, presented whole with eyes and tail on a big round metal platter, and I quickly got the hang of it. I picked the meat off the bones, gathered it up with tomato salsa and grilled onions and shoved the mess in my mouth. Paying the bill wasn’t as easy.
We gave the waitress a few thousand West African francs at the Port Royal in the Blockoss neighborhood. There was a long pause. She asked if either I or my friend had small change. I looked at my friend. My friend looked at the waitress. She flicked her eyes over both of us. Nope.
She gave us a small white slip of paper. It was an IOU for 400 francs, valid only for five days at this restaurant by the lagoon. She had essentially created a makeshift credit system to compensate for the lack of cash and inability to accept payment electronically. The exchange was emblematic of the daily troubles of using small cash in places like Cote d’Ivoire. There’s never enough of it, and the result is a dysfunctional financial system.
The phenomenon isn’t endemic only to West Africa. I encountered small money problems in a few other of the developing countries I visited, including Indonesia and Sri Lanka. On the Gili islands near Bali, I once waited 10 minutes for the waiter to bring me change for one plate of fried noodles. In these areas, cash is still king.
But when cash rules so ubiquitously, money is often lost because people can’t find the difference in change in hard currency, increasing costs of transactions for both ordinary consumers and businesses. In other cases, money gets stolen. According to one estimate by a digital payments provider, businesses can lose between 40-60% of revenues from cash being skimmed when it exchanges hands. At the fish restaurant, I ended up losing the equivalent of 70 cents for a bill that was maybe $5 or $6. But add that up over time, and it could get expensive.
Cash shortages happened the most during my trips in Dakar, Senegal, and Abidjan, Cote d’Ivoire. More than 90% of retail sales in Africa are done in hard currency, says a KPMG report. Meanwhile in the U.S., about a third of consumer transactions are in cash. I struggled to accept that this was simply a part of daily life.
One day in Dakar, I got in a taxi at 11 a.m. and set off to the bank to withdraw cash. The ATM was out of money. My taxi driver drove me around for another hour, to five more ATMs, before I found one that spit out cash. The other days I withdrew cash just fine, but apparently cash runs are not that uncommon. “There are always problems with the banks,” my driver said. “This is life in Senegal, it’s always like this.”
Another time, in Abidjan, taxi drivers have gotten used to looking for small bills, and people have gotten used to being asked. It’s become socially acceptable. On my way to the dental clinic for my tooth extraction, I gave my driver 5,000 francs. He got out of the car, approached the people nearby and found a random woman willing to part with some small bills. He handed me back the exact change.
In other circumstances, I was willing to walk away without my money just to avoid the awkwardness. I bought two bottles of water at a gas station convenience store. The bill was 3,100 francs. I gave the cashier 5,000 francs. She stared at me. She thought I didn’t understand French numbers, so she repeated it in English. No, I said, I understand, but I just don’t have the small change, so you can just give me back 1,000 francs. C’est pas grave. She and her manager both looked at me again, and softened. They gave me 2,000 francs. Their business lost 100 in the process.
Time is also wasted as well. Many people often have to wait in long lines at the bank to get cash or pay a bill. Others sometimes leave work to do so, cutting into job productivity.
I began to hoard my small bills and coins, worried someone would cheat me and not give me change.
But isn’t there a better way? Why haven’t mobile payments taken off, like they have in China? Barriers such as little access to a bank account and gaps in connections between mobile networks in different countries make it tough to send and receive money electronically.
The shift to mobile payments is slow, but growing. About a third of mobile payment accounts in West Africa were being actively used in 2016, doubling from 2011. And more people are sending money in more ways beyond transferring it to a friend or relative. They are now paying for electricity, TV and water bills, and even school registration fees, through their mobile phone.
The convenience of Chinese mobile payments shows what the future could be like for Africa. I ordered dumplings and fried noodles at a Chinese restaurant not far from my homestay in Abidjan. When the bill came, I looked in my wallet. I didn’t have enough small bills, so I went over to the cashier, scanned the WeChat QR code, and in a few seconds, paid it all on my phone.
