The Central Bank of Nigeria (CBN) has announced it will not hesitate to take strong action against banks caught helping illegal hawkers of the nation’s currency.
CBN Governor, Mr. Olayemi Cardoso, made this declaration on Wednesday, December 18, 2024, while addressing the Senate Committee on Banking, Insurance, and other Financial Institutions at the National Assembly.
Speaking during the presentation of the performance index report, Cardoso revealed that any bank branch found to be distributing new Naira notes to currency hawkers or other illegal operators will face a heavy fine of N150 million.
“We won’t spare any bank found guilty,” Cardoso said, stressing that the CBN was determined to curb the illegal trade that has been affecting the nation’s economy.
Cardoso’s remarks come amid growing concerns over the illegal hawking of the newly redesigned Naira notes. Many Nigerians have complained about the difficulty of obtaining the new currency, with reports that some bank staff and unauthorized individuals have been facilitating its sale on the black market.
This crackdown is part of the CBN’s broader efforts to protect the integrity of the currency and prevent the illegal trade that harms the nation’s financial system.
Illegal Naira Trading: A Threat to Economic Stability
The illegal distribution of Naira notes has become a major issue in Nigeria. For months, hawkers have been found selling the new currency at inflated rates, making it difficult for ordinary Nigerians to access their money through legal means.
The CBN’s decision to fine banks N150 million for each branch found guilty is a clear warning to financial institutions to take responsibility for the security and proper distribution of currency.
Speaking on the impact of the illegal trade, Cardoso explained that it undermines public trust in the financial system and contributes to the nation’s economic instability.
“Banks play a vital role in the economy, and if they allow the misuse of currency, it affects everyone,” Cardoso said. “We will not tolerate any form of illegal activity involving the Naira notes.”
The CBN’s commitment to enforcing this policy highlights the seriousness of the issue. The fine aims to discourage banks from aiding the illegal trade and encourages them to take stronger measures to ensure that their staff follow the law.
External Reserves at Record High
During the same briefing, Cardoso also addressed Nigeria’s economic outlook, revealing that the nation’s external reserves have reached a record high.
As of December 12, 2024, Nigeria’s external reserves stood at $42.01 billion, up from $38.35 billion in September. This increase, according to Cardoso, is due to higher earnings from crude oil sales and related taxes.
“These reserves are enough to cover more than nine months of imports of goods and services,” Cardoso stated. “This is far above the international benchmark of three months and serves as a buffer against economic shocks.”
The rise in external reserves is a positive sign for the country’s economy, suggesting that Nigeria is better positioned to weather global financial challenges.
Cardoso highlighted that the increase in reserves is part of a broader trend of economic recovery. Despite the difficulties faced by the country, the governor expressed optimism for the future.
“We are on the right path,” Cardoso said. “The country’s external reserves, the stabilization of the forex market, and improvements in key sectors like services all point to a brighter future for Nigeria.”
Optimism for the Future
While addressing the lawmakers, Cardoso emphasized that Nigeria’s economy, despite facing significant challenges, has reasons for optimism.
He pointed to the gradual stabilization of the forex market, ongoing recapitalization of the banking sector, and positive growth trends in sectors like services as clear indicators of economic recovery.
“In the coming year, we expect further improvements,” Cardoso assured the committee. “The policies we have implemented will help stabilize the economy and foster growth.”
The governor’s comments were met with cautious optimism by the senators present, with many acknowledging the progress made by the CBN under Cardoso’s leadership.
Policy Changes to Support Economic Recovery
Cardoso’s statement also highlighted some of the key measures that have been put in place to support Nigeria’s economic recovery.
In addition to the crackdown on illegal hawking, the CBN has been working to stabilize the exchange rate and improve liquidity in the banking sector. These efforts have helped to reduce volatility in the financial markets and restore confidence among investors.
“We are focused on ensuring that the financial system is stable and that there is greater confidence in our economy,” Cardoso said. “The banking sector is being recapitalized, and the reforms we are implementing will make a significant difference.”
