The CBN Governor Sanusi Lamido Sanusi was Washington DC speaking to a cross section of Nigerians reporters during the just concluded IMF/World Bank meeting. The Nation newspaper gave an interesting excerpt on some of his Q&A and I found this one quite interesting.
You know the interesting thing about our country is that, we try to be an island in the world. If you are in the UK and somebody transfers money to you from the US, in what currency do you get paid in London? You get pounds. If you’re in Japan, you get paid in the Japanese yen. There’s no where in the world and because you get a transfer that you insist on being paid in that currency. The Central Bank did introduce this policy of asking banks to pay in dollars, because there was a time that the banks used to cheat people and pay them in a rate that was lower than the exchange rate. Now we’ve said it very clearly that the exchange rate must be the interbank rate at the date of the exchange and the banks must display that rate in their banking halls.
I don’t see how we are going to continue with a policy that is not consistent with global practices. We can’t continue importing dollars and basically saying that we don’t have confidence in our own currency. It’s like the argument that we should disburse the Federal Accounts Allocation (FAAC) in dollars. Tell me one country in the world that basically distributes its resources in foreign currency, why should Nigeria be the only one, why are we different, why is it that if you send money to someone in Nigeria, who is going to spend it in Nigeria, he should not be paid in the local currency?
He sure has a point doesn’t he?