- Business booms for naira traders as bankers collude to hoard, divert cash
As Nigerians continue to struggle with limited access to cash in banking halls despite threats by the Central Bank of Nigeria, there is a surge in the hawking of naira notes at exorbitant charges in different parts of the country.
Also, some naira hawkers now operate under a new method away from the prying eyes of security agencies.
The CBN had warned that it would penalise Deposit Money Banks found supporting the hawking of naira notes.
Section 21 (1) of the CBN Act 2007 makes hawking, selling and abuse of the naira a punishable offence.
In a circular dated November 13, 2024, signed by the acting Director of Currency Operations, Muhammad Olayemi, the CBN warned DMBs against cash hoarding and diversion, emphasising that such actions would attract stiff penalties.
However, investigations conducted by The Point in some major cities revealed that while many Nigerians still struggled to access cash in banking halls, hawkers had cash in abundance, selling at exorbitant rates despite the CBN’s month-long threats.
A young, tall, light-skinned man with an emerging potbelly sauntered into a banking hall of one of the popular commercial banks on Oba Akran Avenue, Ikeja, Lagos, and headed straight to the wing of one of the cashiers.
“I got this note from one of the Automated Teller Machines outside and will be glad if you can change it for me. Others are also bad but I can manage them,” he bellowed, stretching his hand bearing a tattered N1, 000 note.
The pretty cashier looked up from the transaction she just finished and sized him up from her seat.
“None of our ATMs will dispense this kind of note. Are you sure you got it from us? We cannot load this torn naira into the ATM,” the young lady gave her verdict.
“The business is lucrative. For instance, we make N8, 000 on N20, 000, while N100, 000 attracts a gain of N25, 000 to N30, 000. We have arrangements with bank officials who sell naira notes to us at agreed rates.”
At this point, the customer became enraged and launched into a tirade, shouting at the cashier that she insulted him by calling him a liar.
There was silence in the hall for a fleeting second. It took the intervention of a senior official in the bank to douse the brewing tension by replacing the ragged note with a fairly good one.
This scenario witnessed recently by one of our correspondents largely underscores the scarcity of new naira notes in the country.
This situation, industry sources said, had been further worsened by a cartel of currency hawkers who sell new notes.
The hawkers also find willing buyers in Nigerians ready to buy them at discounted rates based on denomination.
The CBN has repeatedly declared war against naira abuse like ‘spraying’ it at parties with the security agencies arresting naira hawkers at various times.
But all these haven’t been able to check the menace.
Some of them used to litter the Iwo Road end of the Lagos-Ibadan Expressway among other places across the country before the clampdown on them.
Some of the naira hawkers now carry out their activities with the use of a Point of Sales machine to beat security agencies. One of our correspondents who posed as a buyer arranged to meet with two of the currency hawkers in a deal that spanned two weeks and four days.
The first hawker, identified only as Fatimah, asked our correspondent to increase the initial N20, 000 he wanted to change from N100 denomination to N40, 000 because new notes for that particular denomination were scarce. She eventually agreed after intense haggling.
She insisted that the demand for N100 denomination was high coupled with the fact that bad notes for that currency were in circulation.
On the day the deal was to be sealed, she asked if payment would be made via POS or cash.
She later gave an appointment close to a popular eatery on Obafemi Awolowo Way, Ikeja, Lagos.
She also came early carrying a small bag which our correspondent later discovered to be loaded with new naira notes of N200, N500 and N1, 000 denominations.
She said, “I usually don’t accept cash because of the way policemen always chase us but I was forced to learn the rudiment of using a PoS in order to survive. I carry out my business in offices and not an open place like this. But since you have been very persistent and said the event you needed it for was close, I had no choice but to oblige.”
Asked where she put the POS should this writer change his mind not to pay cash, Fatimah said she would not disclose that, adding that she was ready to forfeit the business if the mode of payment changed after an agreement had been reached.
The spread of many dirty naira notes has caused quarrels among commercial bus conductors and passengers on one hand and buyers and sellers on the other hand. The situation is not only limited to N100 denomination but it seems the worst note among other denominations.
A new note seller in the Agege area of Lagos, who refused to be named, revealed that she charges N7, 000 for N20, 000 new notes.
“It is difficult to get cash these days because the bankers have increased their charges. Sometimes, they take as high as N3, 000 on N10, 000 new notes. We have to add our gains too. It’s business,” she said.
Another cash dealer, who identified herself as Rafiu, said that there was a high demand for fresh naira notes at weddings and burials.
“The business is lucrative. For instance, we make N8, 000 on N20, 000, while N100, 000 attracts a gain of N25, 000 to N30, 000. We have arrangements with bank officials who sell naira notes to us at agreed rates,” Rafiu said.
A bank worker disclosed that she often sold N200, 000 mint notes for N230, 000, making a gain of N30, 000.
When asked why some bankers sold naira notes, the worker said, “It is not that you can’t get this cash for free. But the process of getting it inside the bank is not easy. That is why even we, bank workers, have to settle some people to bring the cash notes out for us.”
Another bank worker in Abeokuta, the Ogun State capital, who spoke on condition of anonymity, stated that “cash dealers” who resold at parties and social gatherings bought N20, 000 for N25, 000 and N100, 000 for N120, 000.
He disclosed that freshly minted naira notes were not usually available to bank customers over the counter, “but we have special arrangements for cash dealers who specialise in reselling at parties and social gatherings.”
Also in Osogbo, the Osun State capital, it was discovered that cash trading also thrived, with some hawkers revealing that they bought and sold the mint meant for bank customers.
Investigations revealed that some bank officials prioritised selling mint to high-end clients at agreed prices.
The officials, often from new-generation banks, collaborated with cash dealers to profit from the notes.
A mint seller said, “We always meet outside the bank premises whenever they want to give me the money. Bank officials sell N20, 000 worth of mint in N200 denominations to me at N5, 000, while I pay between N8, 000 and N10, 000 for N50, 000 worth of mint.”
She added that she resold N20, 000 mint at N28, 000 and N50, 000 mint at N65, 000 to customers.
At clubs, she charges N30, 000 for N20, 000 mint and N70, 000 for N50, 000 mint.
In Ibadan, Oyo State, a similar trend was observed on Iwo Road, where traders sold cash at increased rates.
A trader, Akeem, disclosed that N10, 000 in minted notes now costs N2, 000, while N50, 000 is sold for N5, 000.
Another trader, Ibrahim Bako, attributed the rising rates to the prevailing economic situation.
“Everything has increased. We used to sell N5, 000 for N1, 000, but now it is N2, 000. The difference is small, but it has gone up because of the situation in the country,” he said.
Given the scarcity of money in Imo State, especially for Point of Sale operators, big shops, supermarkets and filling stations have resorted to making extra gain by hawking their cash.
A PoS operator, who gave his name as Emeka, said, “We buy the money from big shops, supermarkets and even filling stations depending on your contacts.”
The owner of a big shop in Ekeonunwa market, who spoke on condition of anonymity, said, “We want to ensure the scarcity of money is addressed.
“Instead of going to the bank to deposit the money and the same bank will collect interest rates and give you less than N20, 000 across the counter, it is better we hawk it to the PoS operators and make extra gain. We don’t sell anything less than N100, 000,” he said.
Another currency hawker, who gave her name only as Oyinade, said she used to get the new notes from an agent based on Lagos Island.
She, however, refused to give out his mobile when we begged to do that even when our correspondent said there was a business idea he wanted to discuss with him.
She said, “We have an association even though we are not registered. We know ourselves and you have to join us and meet the requirements before you can even meet our agent. I cannot just give you his number like that. He doesn’t know you and only those of us who get goods (new notes) from him always call him on the phone for any business deal.”
Oyinade further said the use of POS was a new initiative which some of them just took advantage of to ease the stress of carrying cash around.
She added, “We carry lots of cash and because the notes are new, you cannot know the huge amount of cash we carry. The use of PoS not only makes transactions easy for us, it also shields us from incessant arrest by policemen. Soon, you will not see any of us displaying new notes again at event centres or at bus stops as we would have perfected how to deliver the money to customers. Many of us are no longer on the street. Does it mean we no longer trade currency?’’
Asked the source of the new notes, Oyinade said she couldn’t say precisely but was sure that the currency merchants had a strong link with those in charge of money.
“None of us can go to any bank to buy new notes. We buy as high as N400, 000 notes of different denominations from the agents and pay per wrapper. Which bank will sell that to us?” she queried.
It was gathered that the new notes’ agents had ready hawkers, the majority of whom are females. It was also learnt that there was an umbrella association for the naira hawkers.
A senior bank worker in one of the commercial banks in the country, who refused to give his name because he was not authorised to speak on the matter, said naira hawking was a big business.
The bank worker said his experience in the banking sector showed that there was a cartel in some of the banks reaping bountifully from illegal alliance with naira merchants.
He also noted that some customers usually approached their account officers or those known to them in the banks to request new notes whenever the need arose.
The source added, “There was a case of a known customer who wanted to hold a party sometime last year somewhere in the South West and he came to the bank to ask for new notes. Since most banks usually don’t have new notes for keeps, the cash unit was told of the request and after a week, the money was made available to him. The amount he wanted was about N150, 000 in N200 denomination. I am sure that the bank was certain that he truly wanted to use it for the event he claimed it was for.”
He explained that it was not easy for a customer who hawked naira to constantly come to the bank to make such a request.
The bank worker stated, “The bank will become suspicious and moreover, how long would the trading of such paltry notes from the bank go? I think the merchants you mentioned could be influential and get the new notes from the source banks also get the bulk of their money from. I cannot rule that out. This is Nigeria.”
According to him, customers with mutilated notes bring them to banks to either save or in exchange for moderately good ones but some banks are also trying to reject such notes.
He noted, “The real situation is that the CBN charges the banks bringing mutilated notes a certain percentage before replacing them with new ones. Most banks would rather avoid mutilated notes in order not to pay sorting charges.
“Well, activities of naira hawkers may be negatively affecting the circulation of new notes, but I guess the buyers of the notes expect the collectors to also spend them after ending their events, except those ones stock them in their houses.”
An accountant, Bosun Olaofe, said the business of trading in new naira notes would continue as long as people still held events and parties.
He added that it was a cultural thing for people to think that new notes should be ‘sprayed’ at parties.
Olaofe stated, “The government has a lot to do if it indeed wants to check the hawking of new notes. If there is no market for new naira notes, there will be no need for anybody to trade in them. It shows there is a cartel and that is what the relevant authorities should work on. Parties are held almost every weekend and you need to see the display of new notes at the events to know that the notes are indeed needed.
“The Bankers’ Committee’s resolve to prosecute any Nigerian who ‘sprays’ or sells the naira is in order. I only hope that it will follow up its position because much has been said about it in the past by security agencies without any tangible thing coming out of it.”
On his part, an economic analyst and Chief Executive Officer, Cowry Asset Management Limited, Johnson Chukwu, said the first thing to note was that people would be willing to pay for anything that had a utility to them.
He further said people would also be ready to pay for any scarce item with a price tag.
Chukwu said, “Nobody is comfortable with dirty notes either for spending or holding them. Also, the use of new notes at parties is a cultural thing. You will not eradicate that. We live in a society where we hold parties and celebrate people.”
He noted that the CBN would need to sustain the culture of withdrawing old notes in circulation and replacing them with new ones.
According to him, it is fallacious to accuse naira hawkers of being responsible for the scarcity of new notes since such notes are essentially in short supply.
He stated, “They don’t print new notes. That is why whenever you go to the bank for new notes, they will say they don’t have any. If they do, of what importance will it be for them to keep them?”
The Chairman of the Bank Directors Association of Nigeria and Fidelity Bank Plc, Mustafa Chike-Obi, condemned the practice of cash hawking and called for the arrest and prosecution of any bank worker found culpable.
He said, “In every business, you will find individuals who try to break the rules. However, banks have no interest in selling mint notes. Anyone engaging in such practices is acting outside the guidelines of the bank.
“If you know of any such persons, please, expose them because these actions occur without the knowledge or approval of the banking system. We are 100 per cent against it. It does not benefit us in any way. Any staff involved in this should be apprehended and punished.
“As the chairman of Fidelity Bank, if any of our staff engage in such activities, we will report them to the police. They will be arrested and dismissed.
“The banking system does not condone such behaviour. Therefore, people should not label this as a systemic issue. It is a highly unusual occurrence. While one or two individuals may be involved, as a banking system, we are 100 per cent against it.”
“We have an association even though we are not registered. We know ourselves and you have to join us and meet the requirements before you can even meet our agent.”
He attributed the troubling trend to the insufficient cash supply in banks, saying, “We will file the appropriate reports with the CBN to request more cash because it does not help us when our customers come looking for cash and we do not have it.
“Like I have said, the root cause of this problem is the insufficient supply of cash, and this is being addressed by both the banks and the CBN. However, let me add this: the CBN’s current monetary policy aims to reduce inflation and stabilize the exchange rate.
“To achieve this, they must mop up excess liquidity in the system. So, some of what you are observing may be a consequence of the CBN’s efforts to reduce liquidity in the economy.”
In his reaction, a human rights lawyer, Festus Ogun, called on the security agencies, especially the police and men of the Economic and Financial Crimes Commission to join the CBN in waging war against the cash hawkers.
When contacted regarding actions taken by the apex bank weeks after issuing the threat, and how many banks had been sanctioned for disobeying its order, the CBN acting Director of Corporate Communications, Mrs. Hakama Ali, did not respond to calls or messages.
EFCC to grill Okoya’s sons over Naira abuse video
Meanwhile, the Economic and Financial Crimes Commission has summoned Subomi and Wahab Okoya, sons of billionaire industrialist Razaq Okoya, over alleged naira abuse.
The brothers were directed to appear at the EFCC Lagos office on Awolowo Road, Ikoyi, by 10 a.m. on Monday, January 13, 2025 (today).
This development follows a viral video showing the Okoya brothers spraying naira notes while a police officer held wads of cash in what appeared to be a promotional activity for a new song.
The EFCC, in an invitation signed by Acting Director of the Lagos Directorate, Michael Wetkas,said the invitation was part of its commitment to enforcing Section 21(3) of the Central Bank of Nigeria (CBN) Act, 2007, which prohibits the abuse of the national currency.
The video has also drawn the attention of the Nigeria Police Force, which identified and detained the officer seen in the clip.
The Force spokesperson, Muyiwa Adejobi, confirmed that the officer’s actions were unethical and that he would face disciplinary measures as part of the police’s efforts to uphold professionalism and integrity.
Public outrage over the incident has reignited calls for stricter enforcement of naira abuse laws, particularly against high-profile individuals.
In 2024, the EFCC intensified its crackdown on similar offenses, leading to arrests and prosecutions of celebrities, including social media figures Bobrisky and Cubana Chief Priest, for defacing and abusing naira notes in public displays.
The case involving the Okoya brothers is the latest in a series of high-profile incidents as authorities emphasize equal application of the law and the preservation of the naira’s integrity.
