Market News

by Chima Nwokoji

THE Central Bank of Nigeria (CBN) has raised alarms over the rising trend of illicit transactions involving the Naira, warning that such activities threaten the stability of the financial system.

CBN Governor, Olayemi Cardoso, revealed the findings on Thursday at the Bank’s Security Workshop in Abuja, where security and law enforcement agencies gathered to address the issue. He stated that recent mystery shopping exercises in key commercial cities, including Abuja, Asaba, Awka, Benin, Ilorin, Kano, and Ibadan, exposed widespread abuse of the Naira. Traders and middlemen were found imposing illegal premiums on cash transactions.

A major concern from these activities was the practice of selling banknotes at a premium ranging from 20 to 40 percent per transaction. The severity of the issue was highlighted by a recent case where N2.3 million in cash was purchased for N3.2 million due to inflated pricing by illegal cash traders.

Cardoso warned that these practices distort the value of the Naira and erode public confidence in the financial system. He noted that Naira abuse is frequently displayed on social media, where individuals mishandle, spray, and even step on banknotes at social events.

“When we talk about credibility and trust, we don’t build it this way,” he said. “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 CBN governor urged law enforcement agencies to intensify efforts in identifying and prosecuting individuals involved in illicit currency dealings. He emphasised that sending a strong message would foster responsibility and respect for the Naira.

Additionally, he highlighted security challenges affecting CBN operations, including a shortage of armed security personnel, delays in security clearances for currency transportation, and uncoordinated handling of cash-in-transit services. He called for a structured approach, improved security protocols, and better collaboration between regulatory bodies and law enforcement agencies.

National Security Adviser, Nuhu Ribadu, echoed these concerns, stressing the need for tougher enforcement actions. He warned that unregulated cash movements across Nigeria pose a serious risk, with large sums transported via commercial aircraft, private jets, boats, and other means without proper oversight.

Ribadu called for stricter controls to prevent illegal activities and urged financial institutions to enhance internal security. He emphasized that collaboration between regulatory agencies and security forces is essential to tackling illicit financial activities and restoring confidence in the financial system.