“40% Per Transaction”: CBN Takes Action As Naira Abuse Occurs In Abuja, Kano, Ibadan, Others

• The CBN governor has called for immediate action to curb the growing trend of illicit banknote transactions
• This is as recent shopping operations in some business districts have turned up disturbing instances of Naira commoditisation and misuse
• Cardoso warned that this conduct not only distorts the value of the Naira but also undermines public confidence in the banking industry

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

The growing tendency of illegal banknote transactions has raised concerns, and the Central Bank of Nigeria (CBN) has called for swift action to stop the practice.

This was revealed by CBN Governor Olayemi Cardoso during the Bank's Security Workshop, which took place in Abuja on Thursday and brought together law enforcement and security organizations to discuss the matter, The Nation reported.

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Cardoso revealed that recent mystery shopping excercise in prominent business centers, like as Abuja, Asaba, Awka, Benin, Ilorin, Kano, and Ibadan, have revealed alarming cases of Naira abuse and commoditisation.

“A critical concern that arises from these transactions is an illegal act and a premium charged on banknotes ranging from 20% to 40% per transaction,” the CBN Governor stated.

“The gravity of this situation is further exposed by a recent exercise where banknotes amounting to N2.3 million were acquired with a total payment, including premiums, of N3.2 million.”

Cardoso cautioned that this behavior erodes public trust in the banking sector in addition to distorting the value of the Naira. He pointed out that misuse of the Naira is commonly witnessed on social media, where people are seen mishandling, treading on, and even spraying banknotes during social gatherings.

“When we talk about credibility and trust, we don’t build it this way,” he stated. “The blatant disregard for our nation’s legal tender not only weakens the value of the Naira but also erodes respect for our national identity. If we disrespect it this way and expect a strong Naira, we are deceiving ourselves.”

The governor of the CBN urged stringent steps to discourage these activities, highlighting the responsibility of law enforcement in locating and apprehending those involved in illegal currency transactions.

“By sending a strong message to the public that these actions will not be tolerated, we can foster a sense of responsibility and respect towards our currency,” he added.

In addition to these cash-related issues, Cardoso listed more general security issues that the CBN faces, such as the scarcity of armed security guards, particularly in high-risk areas; the delays in acquiring the security clearances required for operations like currency evacuations; disruptions in regular approvals that impact operational effectiveness; the disorganized management of cash-in-transit services that result in unnecessary arrests and detentions; and the necessity of closer cooperation to counter illegal currency trading activities.

Cardoso asserts that a more organized strategy, better security measures, and increased collaboration between law enforcement and regulatory organizations are necessary to address these issues.

“We all have a tremendous responsibility to protect what has been accomplished,” he said.

“This is not just a Central Bank problem. We all have to work together and take pride in restoring confidence in the financial system. The Naira is more than just a currency; it is a symbol of our national identity, and its strength is crucial for the economy.”

CBN shares plan to tackle commoditisation of Naira

Legit.ng reported that Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has presented a thorough plan to address the ongoing commoditization of the naira with the aim of restoring its standing as a legitimate national currency.

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This declaration was made during the first-ever Stakeholders Conference, with the topic "Commoditization of Naira: The Way Forward," which was held over the weekend in Lagos by the Committee of Heads of Banks Operations (CHBO).

Cardoso stated that the naira's commoditization is a serious danger to Nigerians' everyday life, as they depend on the currency for transactions, as well as the banking industry.