The Central Bank of Nigeria has raised concerns over the increasing trend of illicit transactions involving banknotes, warning that the practice threatens the stability of the financial system.
CBN Governor, Olayemi Cardoso, disclosed this on Thursday at the Bank’s Security Workshop in Abuja, where security and law enforcement agencies gathered to address the issue.
He revealed that recent mystery shopping exercises conducted in major commercial hubs, including Abuja, Asaba, Awka, Benin, Ilorin, Kano, and Ibadan, uncovered widespread abuse of the Naira, with traders and middlemen imposing illegal premiums on banknotes.
He stated that a critical concern arising from these transactions was an illegal act where banknotes were exchanged at a premium ranging from 20 to 40 per cent per transaction.
According to him, the gravity of the situation was highlighted by a recent case where banknotes amounting to N2.3m were acquired at a total payment of N3.2m due to inflated pricing 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 not only distorts the value of the Naira but also erodes public confidence in the financial system.
He noted that the abuse of the Naira was frequently displayed on social media, where individuals were seen mishandling, spraying, and even stepping on banknotes at social events.
He stressed that such actions undermined respect for the national currency and weakened 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 deter these practices, urging law enforcement agencies to step up efforts in identifying and prosecuting individuals engaged in illicit currency dealings.
He said that by sending a strong message to the public that these actions would not be tolerated, authorities could foster a sense of responsibility and respect for the national currency.
He also raised concerns over security challenges affecting the CBN’s operations, including the limited availability of armed security personnel, delays in obtaining necessary security clearances for currency evacuations, interference in routine approvals, and the uncoordinated handling of cash-in-transit services, which often led to unwarranted arrests and detentions.
According to him, addressing these issues requires a more structured approach, improved security protocols, and enhanced cooperation between regulatory agencies and law enforcement bodies.
“We all have a tremendous responsibility to protect what has been accomplished,” he said. “his 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.”
The National Security Adviser, Nuhu Ribadu, also stressed the need for law enforcement agencies to take tougher action against offenders.
He said that enforcement actions were necessary to instil accountability and deter impunity, which he described as a major issue in the country.
He also expressed concerns over the unregulated movement of cash within the country and called for stricter oversight.
He stated that in Nigeria today, commercial aircraft often transported large sums of cash, sometimes occupying half of the seats, while private aircraft, boats, and other means of transport were also used to move funds outside regulatory oversight.
He warned that the lack of control created an avenue for illegal activities to thrive and called for a regulated system where currency movement was properly supervised and tracked.
Ribadu urged financial institutions to strengthen their internal security measures and called on law enforcement agencies to be proactive in tackling emerging threats.
He encouraged greater collaboration between regulatory agencies and security forces to ensure a more effective response to illicit financial activities.
