CBN, ONSA’s Renewed Pact Against Naira Abuse

With the naira still being abused in various ways, the renewed collaboration between the CBN and ONSA offers another opportunity to address it frontally, Abdulwahab Isa reports

 

 

The Central Bank of Nigeria (CBN) is doubling up its efforts to contain various abuses confronting the nation’s prime asset, the naira.

As a custodian of the country’s currency, the Central Bank of Nigeria (CBN) encourages the public to be ‘responsible’ in handling the banknote to preserve the quality and enhance the lifespan of the naira.

The rules for naira preservation as prescribed by the apex bank underscore the pride attached to it.

Naira handling rules

The apex bank came up with a checklist, a sort of thumb rule on how naira should be handled with dignity and decency.

Amongst several rules for handling the naira, the CBN advises the public not to store it indecently. It advises, amongst others, to keep banknotes clean and flat and to avoid folding, crumpling, or stapling.

Not writing on the naira, not squeezing the naira; storing it in a wallet, purse, or pouch. Not defacing the naira; avoid exposing banknotes to liquids like water, oil, etc.

The bank forewarned against spraying of the naira. In addition, it enjoins the public to give cash gifts in envelopes or via electronic channels and to avoid hawking the naira.

Handling of naira gets a legal backing under Section 21 of the CBN Act, 2007. It rules on acts that constitute naira abuse, which is punishable by imprisonment for a term of not less than six months or a fine not less than ₦50,000 or both.

These include spraying, dancing, or matching/stepping on the Naira: This is explicitly prohibited and constitutes an offense. On many occasions, the apex bank frowns on continued abuse of currency notes by the general public, especially during weddings and other occasions.

It warned severally against the abusive act of hawking naira. In 2021, when naira abuse got to the peak, CBN had to use every occasion as an enlightenment forum to counsel the public on mishandling of the naira.

In Gombe, that year, the bank organised a fair with the theme ‘Promoting Financial Stability and Economic Development.’

The Principal Manager, Currency Operations Department at the time, Mrs. Ngozi Etim, spoke about the law banning people from matching money subsisting.

The CBN Fair was a harmonised sensitisation on all CBN initiatives, which include real sector financing and intervention, payment system initiatives, consumer protection clean naira note policy, financial inclusion, consumer rights, etc.

The event was held simultaneously in Bauchi and Gombe states. Etim noted that envelope remained the best and most acceptable means of extending goodwill at events and not by deliberately attempting to discredit the Nigerian currency by spraying and eventually stepping on it.

She said: “Money should not be squeezed but put into the envelope. Oil should not be allowed to touch the money; keep it neat like your clothes. You don’t dirty your clothes, and you don’t keep your clothes on the ground.

So, there is a need to keep our money well. Don’t match our money so that it can stay long. Naira is our symbol of identity.”

She said that the current CBN Act empowered the bank to arrest those who abuse the currency, adding that the proper handling would ensure the durability of the notes.

The apex bank has had various public engagements aimed at changing public attitude towards safer handling of the local currency.

The public counseling does not have the desired result, as abuses of naira, which are in various forms—spraying at ceremonial venues, public hawking—continued unabated.

Naira abuse continues

The Central Bank of Nigeria (CBN) officials, with the backup of the police and other security agencies, from time to time conduct raids across locations where illegal trading in Nigerian currency (naira) notes takes place across the country.

In the Federal Capital City of Abuja, Lagos, and other city centers, security agents routinely raid currency hawking spots. Arrests were made in all the raids. The culprits are let go after hours.

However, last year, the efficacy of the CBN Act of 2007, which prohibits naira abuse, was put to test. Okuneye Idris Olanrewaju, better known as Bobrisky, was accused of “tampering” with naira banknotes by spraying them at a social event.

Operatives of the Lagos Zonal Command of the Economic and Financial Crimes Commission (EFCC) invited Bobrisky following a video report of spraying and flaunting wads of new Naira notes at the premiere of a movie, Ajakaju, produced by Eniola Ajao, a Nollywood actress and producer, at Film One Circle Mall, Lekki, Lagos, on March 24, 2024.

The investigation also revealed that he had also committed the alleged offense at some other event centers and parties at different times.

On April 12, 2024, Justice Abimbola Awogboro of the Federal High Court, sitting in Ikoyi, Lagos, sentenced Idris Okuneye, a.k.a. Bobrisky, to six months imprisonment over the mutilation of the naira notes.

He was arraigned on Friday, April 5, 2024, on a four-count charge bordering on mutila – tion of the naira notes to the tune of N490,000.

DMBs on CBN searchlight

Deposit money banks (DMBs), through their numerous branch networks, are conveyor for the supply of naira into circulation. To curb incidents of hawking, which employees of some DMBs are fingered for, the Central Bank of Nigeria came up with a plan.

It slammed a fine of N150 million on deposit money banks found guilty of facilitating the illegal flow of mint naira notes to currency hawkers and unscrupulous agents.

A circular to that effect was issued on December 13, 2024, signed by the Acting Director of the Currency Operations Department, Mohammed Olayemi.

The circular revealed that the CBN was concerned about the increasing prevalence of mint naira notes being traded by hawkers, a practice the bank described as impending efficient and effective cash distribution to customers and the general public.

The circular, which referred to an earlier directive dated November 13, 2024, highlighted the apex bank’s determination to address the

The renewed collaboration between CBN and ONSA to tackle all forms of naira abuse is a welcome development. It’s better late than never

commodification of the naira. Under the directive, any branch of a financial institution found culpable will face a penalty of N150 million for the first violation.

Subsequent infractions, the CBN warned, would attract stricter sanctions under the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020.

To ensure compliance, the apex bank stated that it would increase periodic spot checks in banking halls and ATMs while deploying mystery shoppers to uncover illicit cash hawking spots across the country.

The circular read: “The CBN has noted with dismay the prevalence of illicit flow of mint banknotes to currency hawkers and other unscrupulous economic agents that commodify Naira banknotes, thus impeding efficient and effective cash distribution to banks’ customers and the general public.

“CBN will continue to intensify the periodic spot checks of the banking halls/ATMs to review cash payouts to banks’ customers, as well as mystery shopping to all identified cash hawking spots across the country.

“In this regard, any erring deposit money banks or financial institutions that are culpable of facilitating, aiding, or abetting, by direct actions or inactions, the illicit flow of mint banknotes to currency hawkers and unscrupulous economic agents that commodify Naira banknotes shall be penalized at first instance N150,000,000.00 (one hundred and fifty million Naira) only, per erring branch, and at later instances, apply the full weight of relevant provisions of BOFIA 2020.”

Seeking ONSA’s support

Determined to nip in the bud all forms of naira abuse, the CBN Governor, Mr. Olayemi Cardoso, last month, alerted the country to illicit naira transactions involving banknotes.

He called for urgent and concerted efforts to arrest it. Cardoso made the disclosure at the bank’s security workshop held in Abuja, where security and law enforcement agencies gathered to address the issue.

The Chief Security Adviser to the President, Mr. Nuhu Ribadu, hosted the workshop. According to the CBN governor, from a mystery shopping exercise conducted in major commercial hubs, including Abuja, Asaba, Awka, Benin, Ilorin, Kano, and Ibadan, the outcome of the exercise uncovered disturbing instances of naira commoditization and abuse.

“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 ₦2.3 million were acquired with a total payment, including premiums, of ₦3.2 million,” said CBN governor.

Cardoso warned that this practice not only distorts the value of the naira but also undermined public confidence in the financial system.

He said the abuse of the naira was frequently displayed on social media, where individuals are seen mishandling, spraying, and even stepping on banknotes at social events.

According to him, “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.” He called for strict measures to deter these practices, emphasising the role of law enforcement agencies in identifying and prosecuting individuals engaged in illicit currency dealings.

“By sending a strong message to the public that these actions will not be tolerated, we can foster a sense of responsibility and respect towards our currency,” he added.

The CBN governor outlined broader security challenges affecting the CBN’s operations. Responding, Ribadu stressed the need for law enforcement agencies to take stronger action against offenders.

“From time to time, when law enforcement acts, I think they should do more. Bring – ing people to justice, no matter how bitter, is necessary. Impunity is the mother of all the problems we have.

Nobody is punished for bad behavior, and they don’t even see it as a bad thing until they are held accountable,” he said. Addressing the movement of cash within the country, Ribadu called for stricter regulations and oversight.

He said: “When you have a regulated system where one authority supervises currency movement, it ensures proper accountability.

The moment something comes in, you should know why it is coming, verify it, and track it.” He raised concerns about the unregulated transportation of cash, noting that, “in Nigeria today, if you board a commercial aircraft, half of the seats are occupied by money—not to mention private aircraft, boats, and other means of transport.

This lack of control creates an avenue for illegal activities to thrive.” Ribadu urged financial institutions to strengthen their internal security measures and called on law enforcement agencies to be proactive in tackling emerging threats.

He said: “Engage with operators, collaborate with law enforcement, and take responsibility. “We are in a transformation period, and we must change the way we handle our financial security.”

The workshop ended with a renewed commitment from stakeholders to enhance enforcement mechanisms, increase public awareness, and strengthen inter-agency cooperation to protect the integrity of the naira and the financial system at large.

Last line

The renewed collaboration between CBN and ONSA to tackle all forms of naira abuse is a welcome development. It’s better late than never.