Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has unveiled a comprehensive strategy to tackle on-going commoditization of the naira, with the objective of reinstating its status as a credible national legal tender.
This announcement was made during the inaugural Stakeholders Conference hosted by the Committee of heads of Banks Operations (CHBO) in Lagos at the weekend, themed ‘Commoditization of Naira: The Way Forward’.
Cardoso articulated that the commoditization of the naira poses a significant threat not only to the banking sector but also to the daily lives of Nigerians who rely on the currency for transactions.
He described naira commoditization as a process by which the national currency is being treated as a tradeable asset with its intrinsic national value being subjected to the principles of capitalism rather than being seen as a means of exchange for economic and items of value.
According to him, the Naira is not merely a currency; it embodies our national identity. Its stability is vital for economic growth and development.” Recent trends, however, have seen the Naira treated as a commodity rather than fulfilling its primary function as a medium of exchange.
“The commoditization of the naira, our national legal tender, has become a critical challenge for Nigeria’s financial ecosystem. It is a problem that not only affects the operations of the banking industry but also the lives of every Nigerian that relies on the currency for his day to day transactions.”
The governor said the CBN, as a regulator of the financial system and the integrity of the national currency, is committed to working closely with all stakeholders in the banking system to achieve that goal.
He said the apex bank’s strategies to tackle the commoditization of the naira are enhancing public engagement awareness on the responsible use of the naira, strengthening cash management system to ensure fair distribution across the country, collaborating with law enforcement agencies to enforce existing regulations and bring perpetrators to book, promoting digital payment channels to reduce the use of cash transactions and the need to escalate digital errors to the banks and the CBN.
President of Chartered Institute of Bankers of Nigeria (CIBN), Professor Pius Olanrewaju highlighted three critical areas for consideration, including the need to create public awareness, leveraging more on technology such as the fintech revolution to enhance the value of the currency and regulatory enforcement of existing laws.
Chairman of the Executive Committee of CHBO, Abraham Aziegbe attributed the commoditization of the Naira to severe scarcity which led to its monetisation.
He noted that over the past two years, Nigerians have faced significant challenges due to cash shortages, leading to instances where citizens pay premiums for everyday transactions, saying this situation raises concerns about cash availability and potential hoarding practices among banks.