The Central Bank of Nigeria has raised concerns about the rising incidence of illicit transactions involving banknotes, warning that this trend threatens financial system stability.
CBN Governor, Olayemi Cardoso, made this known on Thursday at the Bank’s Security Workshop in Abuja, where security and law enforcement agencies convened to tackle the issue.
Cardoso revealed that recent mystery shopping exercises in major commercial hubs, including Abuja, Asaba, Awka, Benin, Ilorin, Kano, and Ibadan, exposed widespread Naira abuse.
Traders and middlemen were found imposing illegal premiums on banknotes, with exchanges attracting extra charges of 20 to 40 per cent per transaction.
He emphasized the severity of the issue with a recent case where N2.3 million in banknotes was obtained for a total payment of N3.2 million, reflecting the inflated pricing imposed by illicit cash traders.
He said, “A critical concern that arises from these transactions is an illegal act and a premium charged on banknotes ranging from 20 per cent to 40 per cent 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 erodes public confidence in the financial system.
He also noted that Naira abuse is frequently showcased on social media, where individuals mishandle, spray, and even step on banknotes at social events.
He emphasized that these actions undermine respect for the national currency and weaken its credibility.
“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 called for strict measures to curb these practices, urging law enforcement agencies to intensify efforts in identifying and prosecuting those involved in illicit currency dealings.
He stressed that sending a strong message against these actions would help instill public responsibility and respect for the national currency.
The CBN boss also raised concerns about security challenges affecting the CBN’s operations, including a shortage of armed security personnel, delays in obtaining security clearances for currency evacuations, interference in routine approvals, and the uncoordinated handling of cash-in-transit services, which has led to unwarranted arrests and detentions.
National Security Adviser Nuhu Ribadu, stated the need for tougher action against offenders. He stated that strict enforcement was essential to instill accountability and deter impunity, which he identified as a major challenge in the country.
He also raised concerns about the unregulated movement of cash across the country, calling for stricter oversight.
According to him, commercial aircraft in Nigeria often transport large sums of cash, sometimes occupying half of the seats, while private aircraft, boats, and other means are also used to move funds beyond regulatory control.
He cautioned that the lack of control allowed illegal activities to flourish and called for a regulated system to ensure proper supervision and tracking of currency movements.
Ribadu urged financial institutions to strengthen internal security measures and called on law enforcement agencies to take proactive steps in addressing emerging threats.
