By DAYO ADESULU
Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has pledged decisive action against the commoditization of Naira notes, a practice increasingly prevalent across Nigeria. Speaking at the inaugural Stakeholders’ Conference of the Committee of Heads of Banks Operations (CHBO) in Lagos, Cardoso outlined strategic measures to address this critical challenge to the nation’s financial system.
What is Naira Commoditization?
Cardoso described Naira commoditization as treating the currency as a tradable asset influenced by market forces rather than its primary role as a medium of exchange.
“The Naira is not merely a currency; it embodies our national identity. Its stability is vital for economic growth and development,” he emphasized.
This practice has led to the Naira being monetized in ways that disrupt daily transactions and hinder economic growth.
CBN’s Strategic Approach
To combat this growing issue, the CBN is implementing the following strategies:
- Public Engagement and Awareness: Educating citizens on the responsible use of the Naira.
- Enhanced Cash Management: Ensuring equitable distribution of cash nationwide.
- Law Enforcement Collaboration: Partnering with agencies to enforce regulations and prosecute offenders.
- Promotion of Digital Payments: Encouraging digital transactions to reduce reliance on physical cash.
- Escalation of Digital Errors: Addressing issues with digital channels through collaboration with banks and the CBN.
Stakeholders Weigh In
Abraham Aziegbe, Chairman of the Executive Committee of CHBO, linked Naira commoditization to the severe cash shortages experienced in recent years.
“Over the past two years, Nigerians have faced significant challenges due to cash shortages, leading to instances where citizens pay premiums for everyday transactions.”
He highlighted concerns about cash availability and potential hoarding practices among banks, calling for immediate reforms.
Impact on Nigerians
The commoditization of the Naira poses risks not only to the banking sector but also to ordinary Nigerians. These practices undermine the currency’s value and exacerbate financial inequality, as people struggle to access cash for daily transactions.
Conclusion
The CBN’s commitment to addressing the commoditization of the Naira marks a significant step toward restoring confidence in Nigeria’s financial system. By implementing these strategies, the apex bank aims to safeguard the integrity of the national currency and promote a more inclusive economic environment.
