Illicit sale of new naira notes thrives despite CBN ban. The sale of new naira notes in the open market and motor parks appears to be on the increase with ‘dealers’ charging as much as 20 per cent commission to change used notes to crispy mint ones. This is happening despite the subsisting legislation banning such activity in Nigeria. National Mirror investigations revealed that the sale of freshly minted notes is largely driven by the culture of “spraying” at social functions in which relatives, friends and well-wishers shower celebrants and musicians with naira notes as a mark of solidarity and to underline their status as well-to-do. This practice has long been classified as “abuse” of the national currency but sustains a micro-industry of its own run by unscrupulous bank officials who sell the notes to dealers at a 10 per cent premium of face value. The dealers in turn sell at an extra 10 per cent to willing patrons. For example, a bundle of N100 notes with face value of N10,000 is sold for N12,000 in used notes. Alternatively, a patron will get N8,000 in mint notes for N10,000 used notes. Investigations also showed that the illegal trade is being carried out in the public, even in the presence of police officers at event centres, hotels and motor parks where people travelling to attend social functions “load” themselves with mint notes ready for spraying. Our correspondent observed that currency notes favoured by patrons were the lower denominations such as N10, N20, N50, N100 and N200, depending on the spending power. As a result of the illicit trade, bank customers hardly get paid in new notes even if they make such specific demands. Some hawkers selling new naira notes to guests attending a wedding reception around St. Leo’s Catholic Church, Toyin Street, Ikeja, Lagos, penultimate Saturday told our correspondent that they got the new naira notes from the banks through a special arrangement. “This is my business so I know where to get my goods. I have somebody that assists me to change my money to new notes,” one hawkers said on inquiry by our correspondent. Another woman naira note hawker at Oshodi Motor Park, who did not mention the bank or the price the new notes are being supplied to her, said that she got her supply from the banks. A note hawker, who gave her name as Kudirat, says she is a widow and has to do the business to survive. She explained that she paid as much as 10 per cent of the value of the money they changed at the bank. A source close to the banks told our correspondent that there is a cartel involved in this unwholesome business. A staff of a new generation bank on Broad Street, Lagos, told our correspondent that she had attempted to get new notes in her own branch for a friend but could not. The source revealed that a bundle of N100 notes (N10,000) was being sold at N11, 000 while a bundle of N200 notes (N20,000) was being exchanged for N22, 000 within the bank. National Mirror also gathered that contrary to expectations, higher denominations are also being demanded by rich Nigerians who preferred new notes. “You will hardly see higher denominations on the streets, they are sought after by rich people who prefer to go about with large denominations because of the huge amount of money they carry about,” the source said. However, the managements of some banks told our correspondent that they were not aware that staff sold new naira notes to hawkers. The corporate affairs manager of a second generation bank, who did not want his name mentioned, advised members of the public to report any bank official selling new naira notes to hawkers to the management or to the police, stressing that “it is an illicit business and no law- abiding bank operator would engage in such”. Some stakeholders, however, said that the abuse and sale of naira notes is on the increase because the campaign against naira abuse by the CBN lost its steam shortly it started. President, Progressive Shareholders Association of Nigeria, PSAN, Mr. Boniface Okezie, said that the apex bank needs to step up its monitoring in this area. “I know one may say that the CBN is not an enforcement agency but I do know that with proper monitoring of the banks this ugly trend will be minimised. The new notes move out from the CBN and from commercial banks, so with effective supervision those behind this business could be traced,” Okezie said. Reacting to the rise in sales of naira notes, a Lagosbased legal practitioner, Mr. Bisi Sanyaolu, said that naira spraying is a culture that would take time to die. According to him, the culture was deep rooted and it would take time before it would finally be dropped. He called on the CBN and the enforcement agents to intensify their efforts in getting people to stop. The CBN Act 2007 however prescribes a six-month jail term or a fine of N50, 000 or both for such an offence. The law also outlaws stomping on, spreading, scattering or littering of any surface with naira notes or coins and stepping thereon, regardless of the value, volume, occasion or intent. “By this Act, spraying of naira notes at private or public functions becomes a punishable offence. This also includes adorning, decorating or spraying anything or any person or any part of any person or the person of another with naira notes or coins or sprinkling or sticking of the naira notes or coins in a similar manner regardless of the amount, occasion or the intent,” a section of the law states. The Deputy Governor, Operations, of the CBN, Mr. Tunde Lemo, called on law enforcement agencies in the country to step up actions in the enforcement of the law against abuse of naira while speaking in Abeokuta last week at a sensitisation tour on the commencement of the cashless policy. He absolved the apex bank from blame over the issue, saying the CBN was handicapped. “The Central Bank is a regulatory institution. It is not a law enforcement agency. You know it is criminal to spray money in Nigeria, yet nobody has been arrested by law enforcement agencies in spite of the fact that abuses still go on, particularly at social gatherings. “The CBN cannot go out to arrest people over abuse of naira, we can’t do the job of law enforcement, it is not part of our mandate,” Lemo had said. Speaking to National Mirror on the matter, the Director, Corporate Communications, CBN, Mr. Ugochukwu Okoroafor, said, the apex bank has put a machinery in motion to reduce selling of new naira notes by collaborating with the police. He also denied that the allegations that the CBN was engaged in the practice of hoarding new currency notes only to release same to agents, who paid its officials commissions after selling the mint notes at a premium on face value to interested members of the public.
Posted on: Wed, 19 Jun 2013 06:52:37 +0000
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