- The Central Bank of Nigeria uncovered N2.3 million illicit naira transactions with total payments, including premium, of N3.2 million
- It said that naira abuse undermines respect for the national currency
- Nuhu Ribadu, the National Security Adviser, called for stricter sanctions against offenders
The Central Bank of Nigeria (CBN) says it has uncovered the increasing trend of illicit transactions involving banknotes to the tune of N2.3 million with total payment, including premiums of N3.2 million.
CBN Governor, Olayemi Cardoso, disclosed this at the Bank’s Security Workshop in Abuja, on Thursday, March 13, which had security and law enforcement agencies in attendance to address the issue.
He said 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 of between 20 to 40 per cent per transaction on banknotes.
“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 N2.3 million were acquired with a total payment, including premiums, of N3.2 million,” he said.
Naira abuse undermines respect for national currency
Cardoso warned that the illicit trade of the naira threatens the stability of the financial system, adding that the practice not only distorts the value of the naira but also erodes public confidence in the financial system.
The CBN governor decried the frequent display of naira abuse 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.
“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.”
Cardoso said strict measures would be adopted to deter these practices, urging law enforcement agencies to step up efforts in identifying and prosecuting individuals engaged in illicit currency transactions.
He said sanctioning of perpetrators would send a strong message to the public of the government’s intolerance of the actions, and foster a sense of responsibility and respect for the national currency.
“We all have a tremendous responsibility to protect what has been accomplished.
“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,” he added.
NSA calls for stricter sanctions against offenders
The National Security Adviser, Nuhu Ribadu, also stressed the need for law enforcement agencies to enforce tougher sanctions against offenders.
He noted that enforcement actions were necessary to instil accountability and deter impunity, while expressing concerns over the unregulated movement of cash within the country.
Ribadu cited cases of movement of large sums of cash outside regulatory oversight in commercial aircraft, private aircraft, boats, and other means of transportation.
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.
The NSA said regulatory agencies and security forces needed to collaborate to ensure a more effective response to illicit financial activities.
CBN urges banks to strengthen compliance frameworks to combat illicit financial flows
Meanwhile, TheRadar earlier reported that the Central Bank of Nigeria (CBN) urged financial institutions to strengthen their compliance frameworks in line with global banking standards to combat illicit financial flows and maintain the integrity of the financial system.
The CBN stated this at the Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop held in Lagos on February 28, in collaboration with Citi.
