Business Thrives For Naira Traders Amid Bank Collusion And Cash Scarcity

Business Thrives For Naira Traders Amid Bank Collusion And Cash Scarcity

There has been a significant increase in the hawking of naira notes at inflated prices across various regions of the country, as Nigerians continue to face difficulties in accessing cash from banks despite the Central Bank of Nigeria’s (CBN) warnings against the practice…READ MORE…

The CBN has cautioned that it would impose penalties on Deposit Money Banks (DMBs) that facilitate the hawking of naira notes. In a circular dated November 13, 2024, signed by the acting Director of Currency Operations, Muhammad Olayemi, the CBN reiterated its stance against cash hoarding and diversion, stating that such practices would result in severe consequences.

However, reports from our correspondents who observed the situation in major cities between Thursday and Friday indicate that while many Nigerians still struggle to obtain cash from banks, hawkers are thriving, selling cash at exorbitant prices despite the CBN’s ongoing threats.

Cash Hawking Surge

A hawker in the Agege area of Lagos, who goes by Adebimpe, mentioned that she charges N7,000 for N20,000 in new notes. “Getting cash is tough these days because bankers are increasing their fees. Sometimes they demand as much as N3,000 for N10,000 in new notes. We have to factor in our profits as well. It’s a business,” she explained.

When a Saturday PUNCH reporter approached a banker in the area, posing as someone needing new notes, the bank employee admitted that she frequently sells N200,000 worth of mint notes for N230,000, earning a profit of N30,000 in the process. She added, “It’s not that you can’t obtain cash for free. However, the process of getting it in the bank is complicated, which is why even we bank staff sometimes have to pay others to get these cash notes.”

Another banker in Abeokuta, who wished to remain anonymous, revealed that “cash dealers” who resell at events purchase N20,000 for N25,000 and N100,000 for N120,000. He indicated that freshly minted notes were seldom available at bank counters, but arrangements existed for cash dealers who specialize in selling at social gatherings.

A cash dealer named Rafiu shared that there was a strong demand for fresh naira notes at weddings and funerals. “This business is profitable. For example, we earn N8,000 on N20,000, while N100,000 can yield a profit of N25,000 to N30,000. We have deals with bank officials who sell us the naira notes at prearranged rates,” Rafiu noted.

Collusion Between Bank Officials and Private Dealers

In Osogbo, the capital of Osun State, Saturday PUNCH discovered that cash trading is also prevalent, with some hawkers admitting that they were engaged in buying and selling mint notes designated for bank customers.

Investigations revealed that certain bank officials prioritize selling mint notes to high-paying clients. These officials, primarily from newer banks, collaborate with cash dealers to gain profits from the transactions.

One mint seller elaborated, “We always meet outside the bank to finalize transactions. Bank officials sell me N20,000 in mint with N200 denominations for N5,000, and I pay between N8,000 and N10,000 for N50,000 worth of mint.” She adds that she resells N20,000 worth of mint for N28,000 and N50,000 worth for N65,000 to her customers, while charging N30,000 for N20,000 mint and N70,000 for N50,000 mint at clubs.

In Ibadan, Oyo State, Saturday PUNCH observed a similar pattern on Iwo Road, where traders were also selling cash at heightened rates.

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