Cash Hawking Thrives Amid Naira Scarcity as Bank Collusion Fuels Inflation

Business is booming for naira traders as scarcity persists, fueled by collusion between some bank officials and cash hawkers. Despite threats from the Central Bank of Nigeria (CBN) to penalize banks involved in the illegal sale of mint notes, the situation remains unchanged in many parts of the country. Nigerians continue to face difficulties accessing cash at banking halls, while hawkers have an abundance of freshly minted notes, which they sell at inflated prices.

In Lagos, hawkers in areas like Agege are charging as much as N7,000 for N20,000 worth of new naira notes. A hawker, Adebimpe, explained that the difficulty in obtaining cash due to increased charges by bankers has driven her to charge higher rates. One banker in the state revealed that they often sell N200,000 worth of mint notes for N230,000, profiting N30,000 from the deal. The banker also admitted that bank employees often rely on “settling” to access mint notes.

In Abeokuta, Ogun State, cash dealers are reselling N20,000 for as much as N25,000 and N100,000 for N120,000. These notes are typically unavailable to regular customers but are made available to a select group of dealers who specialize in reselling at social events. Rafiu, a dealer, confirmed the profitability of the trade, noting that she earns up to N30,000 on a N100,000 sale.

In Osogbo, Osun State, the same trend is seen, with bank officials prioritizing high-end clients who are willing to pay a premium for mint notes. A mint seller explained that they buy N20,000 worth of mint from bank officials for N5,000 and resell it at inflated prices. In Ibadan, Oyo State, traders are charging up to N2,000 for N10,000 in minted notes, reflecting the overall rise in rates across the country.

In Imo State, Point of Sale (PoS) operators have also joined the cash trade, sourcing money from big shops, supermarkets, and filling stations, which have started hawking cash to make extra gains. A PoS operator, Emeka, confirmed that they buy cash from large stores and sell it to customers for a profit, ensuring that the scarcity is addressed while making additional earnings.

Despite the CBN’s threats, including a November 2024 warning to banks about cash hoarding and diversion, little has been done to curb the illegal practice. Attempts to reach the CBN’s acting Director of Corporate Communications, Mrs. Hakama Ali, went unanswered.

Bank officials are quick to deny involvement in the illicit trade. Mr. Mustafa Chike-Obi, Chairman of the Bank Directors Association of Nigeria and Fidelity Bank Plc, condemned the practice, emphasizing that such actions are outside the guidelines of the banking system. He called for the arrest and prosecution of any staff found engaging in these activities, attributing the situation to the insufficient cash supply in banks.

Meanwhile, human rights lawyer Festus Ogun has urged security agencies to collaborate with the CBN in combating the growing problem of cash hawking. While the CBN continues to grapple with efforts to reduce inflation and stabilize the exchange rate, the deepening cash scarcity has led to widespread exploitation by hawkers and complicates the lives of ordinary Nigerians.