A huge industry has been built around freshly minted naira notes by individuals who make brisk business selling the nation’s legal tender far above its official face value. This development has prompted law-makers to push for tougher sanctions against perpetrators of the illicit trade. In this report Ibrahim Apekhade Yusuf examines the issues
At the popular Ojota Motor Park, along the Lagos-Ikorodu Expressway, in Lagos, anybody who walks into the park is seen as a potential customer by the army of women, mostly in their 30s and middle-ages who hawk local currencies around the vicinity of the park.
When our reporter visited the park over the weekend, it was an eye-opener of some sort, as he had an encounter with these women who practically dance attendance upon him in their desperation to sell their ‘wares.’
Unknown to this reporter, one of the women who had trained her eyes on him immediately he arrived at the park, promptly accosted him in a smart move to vend off her other aggressive competitors but they would not be outdone as they all trailed behind her to get a piece of the action from a supposed new ‘customer.’
Eyeing the reporter rather coyly, the first interloper asked in staccato English, “Shey you wan change money? I get N100, N200, N500 and N1,000. I go give you correct price, true to God if you buy from me. Abeg help me buy, abeg.”
As the reporter leafed through his breast-pocket, the other women who were within earshot apparently mistook the gesture as a green light and they quickly swarmed on him like bees.
“Abeg come change new naira”, they all chorused sheepishly, and promptly waved freshly mint naira notes of different denominations carefully wrapped in sealed transparent water-proof nylon cases towards the reporter.
But after haggling for some minutes over prices, and sensing that no deal would be struck at the end, the aggressive currency hawkers soon left, visibly angry, and cursing the reporter under their breaths for wasting their precious time.
The scenario at the Ojota Motor Park, is what plays out typically in most motor parks and garages spread across the federation whether in Iddo, under the Oshodi Bridge, Okewo Isheyin Garage, in Matori, Mushin axis of Lagos, Ojoo, in Ibadan, Ikole, Ijero in Ekiti State, Ijebu Ife in Ogun State to Oke-Igbo in Ondo State, even at Jabi park, Abuja, Effurun park in Delta, Onitsha Park, Ramat Park and Iyaro Park, in Benin, where new naira notes are freely hawked by dealers to willing buyers at a fee.
Craze for new naira notes
The sales of new notes has gone for much longer, as hawking of currency notes at social events and parks have been on in the last 15 to 20 years. This trend remained curiously unabated when most money deposit banks (MDBs) in a twist of irony claim non-availability of new notes of lower denominations in their vaults.
In an interview with The Nation, a respondent who simply gave his name as Adio, an upwardly mobile executive in one of the oil-servicing companies in Port Harcourt, Rivers State capital, recalled that when he walked down the aisle with his heartthrob last February, there was a ‘shower’ of naira rain, as guests and well-wishers at the packed auditorium literally pelted the newlyweds with crispy wads of naira notes of all the denominations ranging from N50 to N1, 000.
But the drama, he said, didn’t end at the auditorium.
According to him: “As the wedding train moved outside the pavilion, along Trans-Amadi layout, we were accosted by middle-aged women and men who dangled freshly mint naira notes and who were literally falling over themselves to sell to prospective buyers desirous of going on a spraying spree at the wedding reception. They were out to make brisk business. And as I later found out, many of these currency hawkers have a dossier of happening spots in and around the Garden City, where they throng at most weekends to sell their goods.”
Echoing similar sentiments, Mr. Babatunde Soremekun, a socialite, gave a fresh perspective on what fuels the culture of trade in new naira notes.
He said, “In a society where we have many party buffs, who see any occasion whether weddings, child-dedication, house-warming, birthday parties, to mention just a few as an occasion to make statement.
“Typically, in this part of the world, we are party-lovers with a culture steep in social spending. From experience, I know many of my contemporaries devote quite a lot on spraying at parties. So, this is why there is a boom in the sale of new naira notes.”
Mr. Raji Usman, a bureau de change operator, who also sells new notes around Oando Filling Station in Mushin axis of Lagos, is also on the same page with Soremekun.
According to him, the driving force behind the practice is the craze for new notes by many people who believe that having new notes at social events is a status symbol of sorts.
Expatiating, he said: “Most times, people place orders for new naira notes from midweek and it peaks at the weekend. Majority of our patrons are mostly women of average means.”
Face value of new naira note
There is a burgeoning trade in the sale of new naira notes. Investigation by The Nation showed that sellers demand 30% commission per N1000 new note, mostly of N20, N50, N100 or N200 notes as the case may be.
In most Lagos motor parks, new notes come at a fee, as they charge the highest commission because travelers buy at any rate as they need the lower denominations which are not easy to come by at the countryside.
While N1000 exchanges for between N700 and N800 in Lagos and Ogun States, the same exchanges for between N800 and N900 in the hinterland; depending on the city and how long the supposed party is expected to last.
“Why should a N1000 note, old or mint, exchange for smaller denominations of the naira (N50, N100 or, N200) lose its value to as low as N800 in the same country? That is the level to which mint fresh naira notes hawkers in the country have unofficially devalued the nation’s currency,” Mr. James Olamilekan lamented.
Hawkers, bank staff unholy alliance
Investigation by The Nation revealed that many of the hawkers get their supply of new notes from the banks.
Some of those who confided in The Nation, claimed they are charged exorbitant fees by officials of CBN and commercial banks to get allocation for the new notes, indicating that the charges they pay to get the new notes is passed to the customers just to be able to break even.
When our correspondent who posed as a prospective buyer requested to exchange a huge amount of naira to be denominated in lower figures for a big party coming soon, a middle-aged woman who trades in illegal currency claimed that she could always meet the demand of their customers at short notice.
The Nation further gathered that bank managers in connivance with their colleagues within and outside their branches are responsible for how the mint fresh notes get into the hands of the illegal hawkers.
A source from one of the first generation banks who spoke with our correspondent on the condition anonymity, said it is what the managers live on since the CBN policies has made illegal lending difficult for them.
“There is no branch manager who can deny knowledge of the business. Every week, we get allocation of new notes from the CBN through our head offices or regional branches, to exchange for the old notes in circulation; but what the branch managers and operations managers do is release the money to their clients at an agreed commission.
“The allocation usually comes on Mondays or Tuesdays, but by Friday, you will discover that everything is gone and when you check the books of the branches, no fraud is detected. It is a very clean, lucrative, but illegal business for bankers. It goes on in nearly every bank across the country,” the source said.
Asked why the management does not sanction those involved in the business, the source retorted: “For which offence? What the examiners are after is to ensure that nobody attempts or commits any fraud in the system. In this business, the ledger is always balanced, the record is always clean, and since no fraud is perceived or seen to have been committed or about to be committed, nobody raises any eye brow.”
In his words, “In the good old times, I can still remember following my father or even going alone to any of the few commercial banks to change any amount without having to bribe any one or having to know any of the top bank guys before I am attended to by the officials.”
On why it is very difficult to get clean and crisp notes from the local banks, a source in one of the new generation banks said that the various local banks were in collaboration with the fresh notes sellers, which makes it very difficult for one to get clean notes at the bank unless the fellow is “a powerful personality or a big boy/girl” who the banks could not give dirty notes.
According to him, “is it today you know that bank managers give out the new notes to people for a fee? When last were you paid new notes at your bank after a transaction?”
Extant law outlawing trade in local currencies
Although the sales of mint fresh naira notes booms in most parts of the country, section 26 of CBN’s Act only permit the sale of the naira notes in exchange for other currencies and not naira.
The 1999 constitution, Section 3 and 4 of the country’s currency offences Act cap c44, LFN of 2004, make illegal sales of the naira a punishable offence. It stipulates that offenders could be sent to jail or made to pay fines as the case may be.
The CBN also stipulates that it is an offence punishable under the law to spray or the trample upon the nation’s currency notes. The Act prohibits the spraying of any note issued by CBN during social events.
The Legal Adviser/Director of Legal Services of the apex bank, Mr. Anthony Oladunjoye, quoted in one of the papers he presented at a CBN forum, to have frowned at the spraying and sales of naira, and said it is an offence punishable under the country’s laws.
The CBN’s head of legal department, also stressed that the law enforcement agents are empowered by the law to arrest and prosecute the sellers and buyers of crisp naira notes.
The Currency Act vests the Federal High Court with the jurisdiction and power to try offences committed under the act.
But has anybody ever been convicted for trading in naira notes?
A short message sent to the Director of Communications, CBN, Mr. Ugochukwu Okorafor, was not responded to, even at press time last night.
However, a source at CBN’s Lagos office who also spoke on the condition of anonymity, said the booming business is illegal and the Police have ordered the arrest of both dealers and buyers, adding that the offence is punishable under the laws of the country.
However, it is a wonder that the illegal business has gone on despite the CBN’s various warnings against the trade. Also worrisome is the inability of the police to arrest and prosecute the dealers of the country’s naira notes.
It is hoped that CBN, commercial banks and the Police would join hands to wage war against those who trade in the country’s currency notes, and also provide a situation where people could walk into a banking hall and exchange any amount of mutilated notes for new or denominations of their choices without having to know a bank manager or official.
No longer at ease with illicit naira trade
Apparently miffed by the rising wave of this illicit trade on naira notes, the House of Representatives, has called on the acting Governor of the Central Bank of Nigeria (CBN), Dr Sarah Alade, to investigate the alleged “bribe for new Naira notes” allegation against some of the bank’s staff.
The House of Representatives last Thursday blamed the growing trading in new naira notes on members of staff of the Central Bank of Nigeria.
In a resolution in Abuja, last Thursday, the House alleged that there was a cartel made up of bank workers, who exchange the new naira notes for gratifications and later resell them to members of the public.
The resolution followed a motion by Rep. Ismail Hussain (PDP-Kogi), which was adopted when put to vote by the Speaker, Aminu Tambuwal.
The motion was entitled: “Urgent need to energise the fight against the trading in Naira Notes.”
The House urged the Nigeria Police and State Security Service to investigate, arrest and prosecute any bank official or any person engaged in the illegal sale or hawking of Naira notes.
It also urged the National Orientation Agency (NOA) to further intensify its campaign against the abuse of the Naira.
The House also urged the CBN to replace the mutilated old Naira notes with new ones.
Hussain said that Section 21(4) of the CBN Act, 2007, has made it a punishable offence for any person to hawk, sell, or trade in Naira notes or coins other than the notes issued by CBN.
According to him, the persistent scarcity of new and lower notes has created an avenue for illegal currency hawkers to make brisk business of selling the Naira notes.
Hussain said that the illegal sale of the Naira notes by officials and touts had persisted in spite of the provisions of the CBN Act.
He expressed concern by the unconfirmed reports that currency hawkers bribe some devious officials of the CBN to obtain the new notes which genuine bank customers could not get.
Giving further insight into how the cartel operates, the lawmaker stated that hawkers around Dei-Dei Junction in Abuja were charging N200 commission on every N1, 000 sold, and for “every N2, 000, they get no less than N400.”
Besides investigating the cartel, the motion asked the Nigeria Police and the Department of State Security to arrest and prosecute bank workers involved in the illegal transaction.
A member from Anambra State, Mrs. Uche Uwkwunife, informed the House that the act was common in the Lagos area, where residents “sprayed” notes at social gatherings.
Mr. Fort Dike called on the CBN to ensure that it tracked all new notes released to the public through commercial banks.
“The CBN is to blame for this problem. It is the CBN that issues new notes to the public. If the notes find their way into the wrong hands, we should blame the CBN. The Central Bank is culpable, the commercial banks are culpable; but CBN is the regulator,” he added.
Hussain urged the CBN governor to as a matter of urgency look into the matter.
In their various contributions to the debate, Reps Abike Dabiri- Erewa (APC Lagos), Fort Dike (PDP-Anambra), condemned the sale of Naira notes, saying that it was an illegal and fraudulent act.
Rep Nosakhare Osahon, (APC-Edo), said: “It sounds absurd that people sell Naira notes, this is fraud and corruption of the highest order.”
Osahon added that lower denomination notes like N5, N10, N20 and N50 were scarce in the country, thereby “creating an avenue for illegal currency hawkers to make brisk business of selling the naira notes.”
But whether the renewed vigour by the lawmakers will stem the tide of illicit trade in naira now or in the future, analysts have argued, remains to be seen.
