he Central Bank of Nigeria (CBN) will be naïve to imagine that everyone is pleased with its recent aggressive foreign exchange policy that has seen the nation’s currency substantially regain its respectability. It sounds like an Emefiele magic that in less than three weeks, the almighty dollar plummeted in value in favour of the naira.
For once in a very long time, banks have a surfeit of foreign exchange to dispense with to the point that instead of users strenuously demanding for ‘scarce forex’ it is the banks now conversing for buyers. To make the fun even more enjoyable the black marketers who were in the business of sabotaging the economy by unpatriotically hoarding the available forex are today, thanks to the Emefiele wonder, biting their fingers and gnashing their teeth not knowing where the rain began to beat them.
In its attempt to be fair-minded, the apex bank had warned those manipulating the forex market to retrace their steps, forsake their ways and return to the path of sanity. But that warning was not heeded to. Even when it infused the first and subsequent tranches of forex which had a dramatic impact in the market, the hand writing on the wall was still not legible to most, evident that speculators play hard.
The most recent directive that further crashed the dollar and placed its value at N360 is the icing on the cake for those in urgent demand of foreign exchange as Basic Travelling Allowance (BTA), Personal Travelling Allowance (PTA) to meet either their medical or educational needs. But the saboteurs are not giving up that easily. It is a business they understand pretty well and they are fighting the CBN all the way.
Information reaching the Central Bank of Nigeria (CBN) reveals that some customers seeking to buy forex for BTA, PTA, medical and school fees are being frustrated by some banks with the false claim that the apex bank is not allocating enough forex to them for those purposes.
The CBN insisted that the claim was totally untrue. It had to, therefore, stake its integrity as it reasserted its position that all banks have more than enough stock of forex in their possession for the purpose of meeting genuine customers’ demand for BTA, PTA, tuition and medical fees. “Indeed, on a weekly basis, the CBN has been selling at least $80m to banks for onward sale to their customers for these invisible items,” the acting Communications Director of the apex bank, Mr Isaac Okorafor said.
He further advised members of the public seeking to buy forex for the above-mentioned purposes to go to their banks and obtain same and added that, “Any customer who is not attended to within 24 hours for BTA/PTA or 48 hours for tuition and medical fees should call 07002255226 or send an email to firstname.lastname@example.org, with the name and branch of the non-cooperating bank. Furthermore, no customer should accept to buy forex from any bank at more than the CURRENTLY prescribed rate of N360/$1.”
The banks in Nigeria are grandmasters in the illicit business of round tripping the foreign exchange. It did not start today. It is a well-oiled syndicate that is adept in the intricacies of financial policy manipulation. In the past, sanctions, no matter how heavy, did not deter them. There is no reason to believe that it will now. All the CBN needs is to remain consistent.
Foreign exchange, in particular the dollar and the pounds sterling, are repositories of wealth for most Nigerians. The money they own, especially the illegally acquired ones, are safer in those currencies. The Central Bank of Nigeria must be aware that there is a mopping up of the currencies going on. The black market is bruised but not bloodied. It is still thriving in the understanding that this policy is having its day today. It will be theirs tomorrow. The Governor of the Central Bank of Nigeria, Mr Emefiele must realise, if he hasn’t already, that those praying for his failure are too many and they are relentless in their aspirations. But he has posterity on his side especially when the positive impact of this ongoing forex policy on the economy will begin to manifest in no distant time.
Emefiele’s baby, the Anchor Borrowers Programme and other related agri-business that have continued to receive his financial interventions will surely benefit, immensely too, from this policy thrust that has seen the economy rebound remarkably when compared to what it was late last year and early this quarter. Importers of rice who have been chased out of business are not smiling at Emefiele. These Nigerians play those dirty games with the banks. They will, therefore, go to any length to get back at him. But that will be a long shot especially as this administration commits itself to financial discipline. So far, the CBN Governor has been able to weather the storm by deploying sound economic argument that the government itself has bought into. All he needs now is an unwavering commitment to the implementation of the policy he has already rolled out. By keeping his eyes on the ball, enemies of the country will have their say but the CBN will have its way and the nation its place in the comity of developed economies.
For this reason, the CBN must not be deviated from its policy of firming up the Naira at a rate that will make the economy what Nigerians can and will be proud of. This entails a sustained funding of the forex market made possible by the improvement in the nation’s foreign reserve, a development that is hinged on the return of normalcy in the Niger Delta and an improvement in the oil exploration activities.
It is in this context that the government must proceed with its present arrangement that has reinvigorated the oil and gas sector. The recent mandate given to Vice President Yemi Osinbajo by President Muhammadu Buhari, to manage the Niger Delta issues is proof enough of the government’s commitment to rebuilding the economy ravaged by political locusts in the past years.
Onyewuchi wrote from Abuja