Market News

THE Central Bank of Nigeria’s persistent campaign against naira abuse highlights the damaging consequences of improper handling and mutilation of notes. This includes the increased cost of printing and replacing currency, transaction frustrations, cash scarcity, weakened confidence in the naira, and overall economic harm.

According to the CBN, naira abuse is a serious issue that undermines the integrity, value, and national pride in the currency.

Surely Nigerians do not treat the naira the way they treat the US dollar.

Under Section 21 of the Central Bank of Nigeria Act 2007, naira abuse is a criminal offence. This includes acts such as spraying, writing, stapling, tearing, soiling, mutilating, selling, or rejecting the currency.

The law stipulates penalties, including fines and imprisonment, for offenders. Despite these clear legal provisions, enforcement remains inconsistent, and prosecution is rare.

The CBN has called for collective responsibility, urging banks, market traders, transport unions, schools, religious organisations, and civil society to help combat naira abuse and ensure respect for the national currency.

But enforcement inconsistency, such as the uneven handling of high-profile cases of Instagram celebrity Bobrisky (Idris Okuneye) and Cubana Chief Priest (Pascal Okechukwu) by the Economic and Financial Crimes Commission, sends wrong signals.

While Bobrisky was jailed for six months for spraying at a public event, Cubana settled out of court with an affordable N10 million fine, fuelling public perception of uneven enforcement of laws related to economic crimes, including currency abuse, despite rising economic costs.

The Deputy Governor, Operations Directorate of the CBN, Bala Bello, during the recent flag-off of the nationwide sensitisation on proper naira notes handling in Abuja, bemoaned the situation.

“If we do not act today, poor handling of our notes will continue to raise the cost of printing and replacing the currency, cause frustration in everyday transactions, and weaken confidence in our national currency”, he warned.

He argued that the naira is more than a means of payment; it represents Nigerians’ national pride, their sovereignty, and their shared destiny as a people.

Poor note handling habits, such as folding, spraying notes at social events, writing on them, and even handling them in unhygienic ways by stuffing them in underwear instead of wallets, reduce the lifespan of the currency, further increasing replacement costs.

Additionally, illicit practices such as hawking “mint” naira notes in collusion with some banks exacerbate cash scarcity and drive up illegal premiums, sometimes up to 160 per cent of face value.

Despite warnings and penalties issued by the CBN, some banks have been implicated in facilitating the circulation of mutilated or illegally hawked notes by not sufficiently monitoring cash distribution.

This collusion sustains a racket orchestrated by bankers for illicit gain, undermines efforts to maintain currency integrity, and leads to inefficiencies in cash availability for the public.

It also sustains a pervasive culture of vanity displayed at social events across Nigeria, where even the poor “spray” even if they must borrow to keep up appearances.

It is not uncommon to see people trampling and dancing on “carpets’ of naira notes sprayed at parties. Some even use “spraying devices,” taking turns to display often questionable wealth while less fortunate citizens watch in awe and must just thank God for a good meal at least. Such practices must be strictly punished.

However, the widespread adoption of cheap, reliable electronic transfer systems can reduce naira abuse and cash dependency.

Transactions in Nigeria are still largely cash-driven, but digital payment platforms and mobile money services can significantly reduce physical currency handling to minimise currency wear and tear.

The task before the CBN is to make online payments simpler, faster and at little cost. These days, there are too many charges for online payments, including VAT. Both receiving and paying parties cough up electronic charges. This disincentivises online payments. The digital channels fail, and the public loses money to the rigged system.

Ordinarily, the high-velocity lower denominations – N10, N20, N50, and N100 – should be replaced with coins, but Nigerians have developed a strange aversion to coins over time. Besides, a N10 or N20 note cannot buy any single item in Nigeria today.

Strengthening alternative payment channels aligns with the CBN’s vision of financial inclusion, easing transactional efficiencies, economic growth, and ultimately preserving the naira’s integrity.

This means that the regulator, banks, and fintech firms must combine to ramp up essential infrastructure and streamline customer protection regulations to build more trust in the system and crash transaction costs.