Nigerians are finding it increasingly difficult to access dollars at the Central Bank of Nigeria’s official rate for eligible transactions such as remittances for school fees, student maintenance allowances, Business Travel Allowance (BTA), Personal Travel Allowance (PTA), medical and others.
Reports reaching Nairametrics from people close to the matter suggest it is extremely difficult to get access to dollars because the demand far outweighs supply. Some banks have extended the request period for PTA/BTA from two weeks to eight weeks.
Nairametrics gathered information from bankers and customers of the various banks to understand how easy it is to access the dollars at CBN official rate.
What people are going through
The CBN assured Nigerians that all legitimate requests for foreign currency for eligible transactions such as remittances for school fees, student maintenance allowances, Business Travel Allowance (BTA), Personal Travel Allowance (PTA), medical and other eligible transactions, would be fully met at the official exchange rate.
The apex bank further stated that “all banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements”.
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However, reality tells a different story. In February 2022, Nigerian Banks sent out messages advising customers of reduced dollar limits on debit cards. Furthermore, in May 2022, IATA published information suggesting that Nigeria was owing airline operators a backlog of over $450 million.
Hence, Nigerians may be forced to forget the CBN rate which is trading around N425/$ in favour of the parallel market, which trades at N616/$.
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What the Bank is saying
Stanbic IBTC Bank recently sent a message to its customers stating that it requires six to eight weeks before it can process the request for dollars.
“To serve you better, please be informed that we now require six to eight weeks to process your FX needs for international school fees, upkeep and medical payments. This will enable us to review your requests in line with regulatory requirements and ensure that we can source for FX to fulfil them,” Stanbic IBTC Bank stated.
A staff of one of Nigeria’s largest banks, Zenith Bank, who spoke to Nairametrics on condition of anonymity suggested the wait time could be more than 8 weeks.
He said, “Eight weeks is too small, that’s if you get the dollar at all. Head office only gives $4000 per week to my branch and we have 10-15 customers that want to travel within that week”.
He added, “In such situations, we have to ration and try not to offend our major customer”
Nairametrics also contacted a banker with GTBank who also preferred anonymity as he was not authorized to speak on the matter. He suggested a way out, stating that customers have to apply way ahead of time to get forex.
“We always advise customers to apply 4-5weeks before leaving the country so we can process the PTA.
“It’s really difficult to get dollars at the official rate,” he said.
What the bank customers are saying
Nigerians have always used Twitter to voice out their complaints while tagging the bank or CBN in the post.
Twitteruser@damiayomide confirmed the scarcity saying, “To get PTA in banks na war…this a month to travel date, learnt allocation is one person per week, that 4 people a month @ZenithBank @ZenithBank You can do better.”
— Rios (@damiayomide) July 6, 2022
@TransparencyNGR said “The CBN governor should explain to Nigerians why there are no forex allocation to commercial banks for BTA and PTA. I am writing this waiting at the Maryland branch of STANBIC IBTC BANK. This would be the second trip without forex from my bank. Are Nigerians no longer entitled?”
The CBN governor should explain to Nigerians why there are no forex allocation to commercial banks for BTA and PTA. I am writing this waiting at the Mary Land branch of STANBIC IBTC BANK. This would be the second trip without forex from my bank. Are Nigerians no longer entitled ?
— Corruption Observatory (@TransparencyNGR) May 20, 2022
@mjay_saye complained about payment of school fee. He said, “Mine is not PTA it’s Form A for over 3months now @accessbank_help,@UBAGroup and @StanChartNG all refused to pay for my sister’s school fees depite she’s been warned not to be allowed to write exams that’s coming in few coming weeks. Can you please help us if @ZenithBank can..”
Mine is not PTA it's Form A for over 3 months now @accessbank_help, @UBAGroup and @StanChartNG all refused to pay for my sister's school fees depite she's been warned not to be allowed to write exams that's coming in few coming weeks.
Can you please help us if @ZenithBank can..
— M S Saye (@mjay_saye) June 26, 2022
- The CBN’s maintenance of its official rate comes at a great cost to Nigeria’s external reserves due to the fact that the CBN sells dollars to banks from its external reserves.
- Hence, Nigeria is placed in a position where it won’t reap the benefits of surging oil prices because of the apex bank’s constant intervention in the Forex market. Consequently, Nigeria’s foreign reserve declined by $1.37 billion from $40.52 billion in December 2021 to $39.16 billion in June 2022.
- The World Bank and International Monetary Fund have also stated that the CBN’s multiple exchange rates and trade restrictions are causing more harm than good, advising the apex bank to free float the Naira.