The Central Bank of Nigeria’s Fight Against Naira Abuse
The Central Bank of Nigeria (CBN) has been actively addressing the issue of naira abuse, emphasizing the negative consequences that arise from mishandling and damaging currency notes. This includes increased costs for printing and replacing currency, transactional frustrations, cash shortages, weakened public confidence in the naira, and broader economic harm.
According to the CBN, naira abuse is a serious problem that undermines the integrity, value, and national pride associated with the currency. Nigerians generally do not treat the naira as they do the US dollar, which highlights a cultural disparity in how different currencies are valued.
Under Section 21 of the Central Bank of Nigeria Act 2007, naira abuse is considered a criminal offense. Acts such as spraying, writing on, stapling, tearing, soiling, mutilating, selling, or rejecting the currency are all prohibited. The law outlines penalties, including fines and imprisonment, for those found guilty. However, enforcement of these laws remains inconsistent, and prosecutions are rare.
The CBN has urged various sectors, including banks, market traders, transport unions, schools, religious organizations, and civil society, to take collective responsibility in combating naira abuse and ensuring respect for the national currency.
Despite these efforts, inconsistencies in enforcement have raised concerns. For example, high-profile cases involving individuals like Instagram celebrity Bobrisky (Idris Okuneye) and Cubana Chief Priest (Pascal Okechukwu) have shown uneven treatment by the Economic and Financial Crimes Commission. While Bobrisky was jailed for six months for spraying at a public event, Cubana settled out of court with a relatively small fine, leading to perceptions of unfair enforcement.
During the recent flag-off of the nationwide sensitization campaign on proper naira handling in Abuja, Deputy Governor of the Operations Directorate of the CBN, Bala Bello, expressed concerns about the current situation. He warned that without immediate action, poor handling of notes would continue to increase printing and replacement costs, cause transactional frustrations, and weaken confidence in the national currency.
Bello emphasized that the naira is more than just a means of payment; it represents national pride, sovereignty, and shared destiny. Poor note-handling habits, such as folding, spraying notes at social events, writing on them, and even handling them in unhygienic ways, reduce the lifespan of the currency, increasing replacement costs.
Illicit practices, such as hawking “mint” naira notes in collusion with some banks, exacerbate cash scarcity and drive up illegal premiums, sometimes reaching up to 160% of face value. Some banks have been implicated in facilitating the circulation of mutilated or illegally hawked notes by not adequately monitoring cash distribution. This collusion sustains a racket orchestrated by bankers for illicit gain, undermining efforts to maintain currency integrity and leading to inefficiencies in cash availability for the public.
A pervasive culture of vanity is also evident at social events across Nigeria, where even the poor may spray notes 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 questionable wealth while less fortunate citizens watch in awe. Such practices must be strictly punished.
However, the widespread adoption of cheap, reliable electronic transfer systems can reduce naira abuse and cash dependency. Despite this, transactions in Nigeria remain largely cash-driven. Digital payment platforms and mobile money services have the potential to significantly reduce physical currency handling, minimizing wear and tear on notes.
The task before the CBN is to make online payments simpler, faster, and at little cost. Currently, there are too many charges for online payments, including VAT. Both receiving and paying parties incur electronic charges, which disincentivizes online payments. When digital channels fail, the public loses money to a rigged system.
High-velocity lower denominations – N10, N20, N50, and N100 – should ideally be replaced with coins. However, Nigerians have developed an aversion to coins over time. Additionally, 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 requires collaboration between the regulator, banks, and fintech firms to ramp up essential infrastructure and streamline customer protection regulations. Building more trust in the system and reducing transaction costs will be crucial in achieving these goals.
