Fake naira bank notes are in circulation in Nigeria, and the country's central bank has warned people to stay vigilant. But authorities are doing little to confront the issue, leaving it mostly up to locals to work out if the money they're exchanging is real. As a result, trust in Nigerian currency is being undermined. DW's The Flip Side takes a look.
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00:00 (static)
00:02 In Nigeria, cash is king.
00:07 A survey by the Central Bank of Nigeria in 2020
00:11 showed that 97% of adults use cash
00:15 as the main form of payment,
00:17 and only 6% of the population uses mobile money transactions.
00:21 Holding onto cash can be tricky this time of year,
00:24 but in Nigeria right now, there's also some trickery
00:27 because many banknotes are turning out to be absolutely fake.
00:32 Welcome to the flip side.
00:34 The Central Bank of Nigeria says
00:36 counterfeit high denomination banknotes,
00:39 in particular, are changing hands,
00:42 and many consumers and businesses are either being duped
00:46 or worrying about the fake Naira banknotes.
00:49 Can Africa's biggest economy
00:51 afford yet another cash controversy?
00:53 It's a yes, since the new redesigned
00:55 200, 500, and 1,000 Naira notes were introduced.
01:00 That process triggered an unprecedented cash crunch.
01:04 At the time, the authorities had assured the public
01:07 that the new Naira would prevent counterfeiting.
01:10 So, did anyone expect to be dealing with fake banknotes
01:15 within a short span of time?
01:24 The Central Bank is now urging consumers
01:27 to use electronic forms of payment rather than cash
01:30 to minimize the risk of falling for fakes.
01:33 But fighting counterfeit money
01:34 requires more than just rudimentary inspections.
01:38 Was there ever a plan to introduce infrastructure
01:41 or technology to help verify banknotes?
01:44 Well, not really.
01:46 Nigeria's economists will tell you.
01:49 Official interventions have only really amounted
01:52 to public awareness campaigns.
01:54 But that is just a temporary or low-hanging measure.
01:59 The key is to go forward into digitizing the economy.
02:05 The country's commercial banks
02:07 have machines to verify banknotes.
02:09 But the average citizen simply has to rely
02:12 on their own wits to check if a Naira is real or not.
02:16 Especially the new ones.
02:18 The new ones are mostly, the new ones, the fake,
02:21 are mostly more brighter than blue.
02:23 The blue color on it are more brighter.
02:26 Once I collect, like now I know that the fake one
02:31 is just like ordinary paper.
02:33 What happens when the intervention to counter fraud
02:35 involving banknotes is as minimal as it is in Nigeria?
02:39 People lose confidence in their currency.
02:43 They begin to seek alternatives.
02:45 They begin to look for safer havens,
02:47 maybe in other foreign currencies like the British pound,
02:50 like the American dollar or the European euro.
02:53 And that's the flip side.
02:55 (whooshing)