The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has committed to addressing the growing issue of the buying and selling of Naira notes, a practice that has become prevalent across the country. Speaking at the inaugural Stakeholders’ Conference of the Committee of Heads of Banks Operations (CHBO) in Lagos, Dr. Cardoso, represented by his Senior Special Adviser, Fatai Kareem, described the commoditization of the Naira as a significant threat to Nigeria’s financial ecosystem and the daily lives of its citizens.
The conference, themed “Commoditization of Naira: The Way Forward,” highlighted the increasing trend of treating the Naira as a tradable asset, undermining its primary function as a medium of exchange. Dr. Cardoso emphasized the importance of preserving the integrity of the Naira, stating, “The Naira is not merely a currency; it embodies our national identity. Its stability is vital for economic growth and development.”
Impact of Naira Commoditization
Dr. Cardoso noted that the treatment of the Naira as a commodity disrupts the banking industry and creates economic challenges for Nigerians. He explained that the practice stems from a capitalist view of the Naira, where its intrinsic value is exploited for profit rather than serving as a tool for economic exchange.
Over the past two years, the scarcity of cash has led to situations where Nigerians pay premiums for basic transactions. The Chairman of the Executive Committee of CHBO, Abraham Aziegbe, attributed this issue to the severe cash shortages, which have resulted in the monetization of the currency. Aziegbe also raised concerns about potential hoarding practices within banks, further aggravating the problem.
CBN’s Action Plan
The CBN Governor outlined a series of measures aimed at curbing the commoditization of the Naira and restoring its role as a national legal tender. These strategies include:
- Public Awareness Campaigns: Educating Nigerians on the responsible use of the Naira to foster a sense of ownership and value for the currency.
- Enhanced Cash Management: Strengthening the cash distribution system to ensure fair and equitable availability across the country.
- Law Enforcement Collaboration: Working with law enforcement agencies to enforce regulations and prosecute individuals or organizations involved in illegal Naira trading.
- Promotion of Digital Payment Channels: Encouraging cashless transactions to reduce the dependency on physical cash and mitigate the impact of scarcity.
- Resolution of Digital Payment Challenges: Ensuring that issues with digital transactions are promptly addressed by banks and the CBN to build public trust in electronic payment systems.
Rebuilding Confidence in the Naira
Dr. Cardoso reiterated the CBN’s commitment to ensuring the stability of the Naira and tackling practices that undermine its value. “The commoditization of the Naira is a critical challenge for Nigeria’s financial ecosystem,” he stated. “It is a problem that affects the operations of the banking industry and the everyday lives of Nigerians.”
The CBN’s action plan represents a proactive approach to addressing this challenge, with the aim of safeguarding the Naira’s integrity and promoting economic stability.
As discussions continue, stakeholders within the financial sector and beyond are hopeful that these measures will bring an end to the commoditization of the Naira and ensure its rightful place as a symbol of national pride and economic exchange.
