The Central Bank of Nigeria (CBN) has pledged to intensify its efforts against the buying and selling of Naira notes, a practice that has grown alarmingly prevalent and threatens the nation’s financial stability.
Olayemi Cardoso, Governor of the CBN, condemned the commoditization of the Naira at the inaugural Stakeholders’ Conference of the Committee of Heads of Banks Operations (CHBO) in Lagos. Themed “Commoditization of Naira: The Way Forward,” the event brought together key financial sector players to address the crisis.
Represented by his Senior Special Adviser, Fatai Kareem, Cardoso emphasized that the Naira’s commoditization is not just a banking problem but a national concern.
“The Naira is not merely a currency; it embodies our national identity. Its stability is vital for economic growth and development,” Cardoso declared. He criticized the practice of treating the Naira as a tradable asset rather than a tool for economic exchange, warning that this trend undermines Nigeria’s financial ecosystem.
The commoditization of the Naira refers to the practice of treating Nigeria’s legal tender as a commodity to be traded at a premium, especially during periods of cash scarcity. This practice became particularly rampant during the recent cash shortage, which saw Nigerians paying exorbitant fees to access their own money for daily transactions.
Abraham Aziegbe, Chairman of the CHBO Executive Committee, linked the issue to prolonged cash scarcity.
“Over the past two years, Nigerians have faced significant challenges due to cash shortages, leading to instances where citizens pay premiums for everyday transactions,” Aziegbe remarked. He added that such trends not only create difficulties for ordinary Nigerians but also raise questions about hoarding by financial institutions.
The CBN has outlined a series of strategies to combat the commoditization crisis, aiming to restore the Naira’s integrity and stabilize Nigeria’s monetary system. These include:
- Public Awareness Campaigns: Educating citizens on the proper use of the Naira and discouraging illicit trading.
- Strengthening Cash Management: Improving distribution systems to ensure equitable cash availability nationwide.
- Collaboration with Law Enforcement: Working with security agencies to crack down on those exploiting the currency system.
- Promoting Digital Transactions: Encouraging the use of cashless payment systems to reduce dependence on physical cash.
- Error Resolution Support: Ensuring banks and the CBN address digital transaction issues promptly to build public trust.
“We will collaborate with law enforcement to ensure that regulations are strictly enforced, and offenders are prosecuted,” Cardoso affirmed, underlining the apex bank’s commitment to accountability.
The commoditization of the Naira has far-reaching implications. For millions of Nigerians, the currency has become a symbol of daily struggle rather than economic empowerment. During cash shortages, many were forced to pay as much as 20-30% in extra charges just to withdraw or access cash.
The challenges have also affected businesses reliant on cash transactions, with many forced to increase prices or shift entirely to digital payment systems—a move that not all customers find convenient.
Experts argue that the scarcity of cash, particularly during the botched currency redesign program in 2023, created fertile ground for the commoditization of the Naira. This scarcity exposed systemic inefficiencies in cash distribution and raised questions about potential hoarding by financial institutions.
The situation is further compounded by weak enforcement of existing regulations. Despite laws prohibiting the hoarding and illicit trade of currency, many perpetrators operate with impunity.
The CBN’s push for digital payment systems has been highlighted as a key part of its strategy to reduce dependence on cash. By encouraging the use of platforms such as eNaira and mobile banking apps, the bank hopes to create a more resilient financial system less susceptible to physical cash shortages.
However, challenges remain. Many Nigerians, particularly in rural areas, lack access to the internet or smartphones, making digital payment systems inaccessible. Furthermore, intermittent network issues and errors in digital transactions have eroded public confidence in the cashless system.
Cardoso’s address was a clarion call to all stakeholders, from policymakers to ordinary citizens, to prioritize the Naira’s integrity.
“This is not just a fight for the Central Bank. It’s a fight for the economic future of Nigeria,” he concluded, urging Nigerians to support the bank’s initiatives.
The CBN’s strategies will require coordinated efforts and sustained public trust to succeed. As the apex bank moves to enforce its measures, the coming months will test Nigeria’s resolve to address a challenge that goes beyond currency to the very heart of its national identity.
