CBN uncovers N2.3m illicit naira dealings

• Published On: 14 March 2025 at 18:59

The Central Bank of Nigeria has expressed concern about the rising number of illicit banknote transactions, warning that this trend endangers financial system stability.

CBN Governor Olayemi Cardoso made the announcement on Thursday at the Bank's Security Workshop in Abuja, where security and law enforcement agencies met to address the issue.

Cardoso revealed that recent mystery shopping exercises in major commercial hubs such as Abuja, Asaba, Awka, Benin, Ilorin, Kano, and Ibadan have revealed widespread Naira abuse.

Traders and middlemen were discovered imposing illegal premiums on banknotes, with exchanges charging an additional 20 to 40% per transaction.

He emphasised the gravity of the situation by citing a recent case in which N2.3 million in banknotes were obtained for a total payment of N3.2 million, demonstrating the inflated pricing imposed by illicit cash traders.

He stated, "A critical concern raised by these transactions is an illegal act and a premium charged on banknotes ranging from 20% to 40% per transaction.

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

Cardoso warned that this practice distorts the Naira's value and undermines public confidence in the financial system.

He also mentioned that Naira abuse is frequently documented on social media, with people mishandling, spraying, and even stepping on banknotes at social events.

He emphasised that these actions undermine trust in the national currency and reduce its credibility.

"When we talk about credibility and trust, we don't build it this way," he told reporters. "The blatant disregard for our country's legal tender not only devalues the Naira, but it also undermines respect for our national identity. If we disrespect it in this manner and expect a strong Naira, we are deceiving ourselves."

The governor of the Central Bank of Nigeria urged law enforcement agencies to step up their efforts to identify and prosecute those involved in illicit currency transactions.

He emphasised that sending a strong message condemning these actions would help instill public accountability and respect for the national currency.

The CBN chief also expressed concerns about security issues affecting the bank's operations, such as a lack of armed security personnel, delays in obtaining security clearances for currency evacuations, interference with routine approvals, and the uncoordinated handling of cash-in-transit services, which has resulted in unwarranted arrests and detentions.

Nuhu Ribadu, the National Security Adviser, emphasised the need for harsher penalties against offenders. He stated that strict enforcement was required to instill accountability and deter impunity, which he identified as a major issue in the country.

He also expressed concern about the unregulated movement of cash across the country, calling for stricter regulations.

According to him, commercial aircraft in Nigeria frequently transport large sums of cash, sometimes taking up half of the seats, while private aircraft, boats, and other means are also used to move funds outside of regulatory control.

He warned that a lack of control allowed illegal activities to flourish, and he advocated for a regulated system to ensure proper supervision and tracking of currency transactions.

Ribadu urged financial institutions to strengthen internal security measures and law enforcement agencies to be proactive in addressing emerging threats.