The Naira For The Few? How Do Fresh Bundles Find Their Way To Socialites And Money Traders? By Adenitan Akinola

The Naira For The Few? How Do Fresh Bundles Find Their Way To Socialites And Money Traders?

By Adenitan Akinola, Esq

There is something about the Nigerian naira that has increasingly puzzled me.

New naira notes seem increasingly difficult to find in ordinary circulation, particularly around festive periods. Yet, at the same time, social media is awash with videos of socialites spraying seemingly fresh bundles of ₦1,000, ₦500 and ₦200 notes at parties.

Then there is another interesting phenomenon: the growing presence of naira traders at social events, people who appear to move from party to party, offering to change ordinary cash into fresh notes for those who want to spray.

This raises a simple but important question:

How do large quantities of new naira notes get into the hands of a relatively small group of socialites and money traders when ordinary citizens often struggle to obtain clean notes in Banks?

I am not suggesting that every person seen with new naira notes has done anything unlawful. Social-media videos, by themselves, cannot establish that.
But the disparity is striking enough to deserve regulatory attention.

Where do new notes go?
The Central Bank of Nigeria is the sole issuer of Nigeria’s legal tender. According to the CBN, newly printed notes are distributed from the Nigerian Security Printing and Minting facility to CBN branches, from where they are supplied to deposit money banks and ultimately released to the public through withdrawals.

The CBN’s Clean Note Policy is also designed to ensure that new and fit banknotes are properly issued, recirculated and maintained in good condition.

But visit a bank today to withdraw a substantial amount of cash and the experience can sometimes be very different. Instead of crisp, clean notes, customers may receive worn, dirty or taped notes.

Then, on social media, we see bundles of apparently fresh notes being sprayed at lavish parties. Something deserves explanation. And then there are the money traders. Perhaps even more curious is the apparent business around fresh naira notes at social functions. At some parties, individuals offer to exchange cash for cleaner or newer notes, of course for a premium. This should interest regulators.

The CBN itself states that it is illegal to sell mint naira notes to the public. Its current banknote-handling guidance also identifies selling or trading naira notes for more than their face value as unlawful. The question, therefore, is not simply whether a person who pays ₦100,000 to obtain ₦90,000 worth of fresh notes is doing something wrong.

The bigger question is:
From where did those fresh notes come in the first place? Who supplied them?
Through which financial institution or cash channel? How frequently are particular individuals obtaining large quantities of new notes?
And how do these notes move from the formal banking system into the hands of socialites and money traders?

These are questions that require evidence, not speculation. But they are legitimate questions for the CBN and other relevant authorities to investigate.

What about spraying the bundle?
The law itself is relatively clear on spraying. Section 21 of the Central Bank of Nigeria Act 2007 prohibits abuse of the naira and specifically identifies spraying, dancing or stepping on the currency during social occasions as an offence. Section 21(5)(ii) also gives “spraying” a broad meaning, including adorning or decorating a person with naira notes or coins.

Therefore, the fact that the notes are kept together in a bundle does not necessarily make the conduct lawful. If the bundle is used to adorn or decorate a person, there is a strong basis for treating it as spraying within the meaning of the law.

But possessing a bundle of new naira is not, by itself, an offence. The more difficult question is how that bundle came into the person’s possession.

The bigger regulatory question

Perhaps we have concentrated too much on the person spraying the naira and too little on the journey of the naira before it gets to the party.

If ordinary Nigerians are finding it increasingly difficult to obtain clean, new notes through legitimate banking channels, while substantial quantities of fresh notes are apparently available to some socialites and money traders, the distribution chain deserves scrutiny.

The CBN has a responsibility not only to issue the currency but also to regulate its circulation and maintain public confidence in the naira. Its own Clean Note Policy recognises the importance of ensuring that banknotes in circulation are of acceptable quality.

Perhaps what is required is stronger monitoring of the movement of new notes from the CBN to deposit money banks and from banks into the wider economy.

Unusual large-volume withdrawals of new notes, repeated access to particular denominations and the activities of persons trading fresh notes at social events may all deserve closer regulatory examination.

The question we should be asking

If new naira notes are scarce in ordinary circulation, how do bundles of them keep finding their way to the same social circles and money traders at parties? That is not an accusation. It is a question.

And perhaps it is time the CBN and other relevant agencies provided Nigerians with an answer, not only through enforcement against those who abuse the naira, but also through greater transparency and stronger regulation of the currency-distribution chain.

The naira belongs to all Nigerians.

Adenitan Akinola is a legal practitioner and journalist. He writes from Ikere Ekiti, Ekiti State.