CBN raises concerns over illicit transactions, uncovers N2.3m

The Central Bank of Nigeria (CBN) has raised concerns over the increasing trend of illicit transactions involving banknotes, warning that the practice threatens the stability of the financial system.

CBN Governor, Olayemi Cardoso, disclosed this on Thursday at the Bank’s Security Workshop in Abuja, where security and law enforcement agencies gathered to address the issue.

He revealed that 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 on banknotes.

He stated that a critical concern arising from these transactions was an illegal act where banknotes were exchanged at a premium ranging from 20 to 40 per cent per transaction.

According to him, the gravity of the situation was highlighted by a recent case where banknotes amounting to N2.3million were acquired at a total payment of N3.2million due to inflated pricing by illicit cash traders.

He said, “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 N2.3m were acquired with a total payment, including premiums, of N3.2million.”

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

He noted that the abuse of the Naira was frequently displayed 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,” he said. “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.”