The Governor of the Central Bank of Nigeria, Godwin Emefiele, has blamed the CBN’s funding of Bureaus de Change (BDC) operations with $66 billion over an 11-year period for the current depletion of the country’s reserves, saying this also contributed to the economic crisis.
He complained that the funds if spent on economy-stimulating activities such as infrastructure and industry for wealth creation, would have prevented the current crisis in the country.
“In September 2008, Nigeria’s foreign reserves stood at $62 billion. But what did we do with $62 billion at a time crude price was in excess of $120 per barrel? What we could have done was to save the money, if we couldn’t save the money, invest it in infrastructure and industry that will create productivity and wealth for our people.
Instead, the central bank at that time went about licensing Class A, Class B and Class C bureau de change operators. For Class A BDCs, the central bank was allocating $1 million per week, for Class B, the CBN was allocating $750,000 per week and for class C BDCs, the central bank was allocating $500,000 per week. The CBN was among one of the few central banks in the world allocating dollar cash for BDC operations.”
“What that meant was that in 11 years, we spent $66 billion funding the operations of BDCs which came to an average of $6 billion a year. If we had thought of other ways to utilise our reserve, especially in 2008 when our reserves were as high as $62 billion, certainly we will not be where we are today,”
ThisDay quotes Emefiele as saying.
He said that the period between 2008 and 2011 when oil prices peaked also coincided with the increased investment from the United States and argued that the administration then should have built the reserves and that is responsible for our current plight.
Parts of this article originally appeared in ThisDay Newspapers