“This is not funny”, Debra voiced out at the Bank Teller after she was handed $2,500 dollars of the $4,000 due her under the statutory provision on Personal Travel Allowance (PTA). Aghast, she looked on, hoping to hear that the balance would be handed over to her in a couple of minutes only to be told by the Teller that the balance would be given to her within seven working days.
Enraged and confused, she stormed out of the bank regretting the two weeks she had spent trying to get her allocation after showing concrete evidence of her forex needs. Her rage quickly turned to tension seeing that her travel date was only some days away and the alternative market for meeting her forex needs, the black market, is a no-no, considering the hefty difference in margin.
“What to do”, she muttered repeatedly to herself as she walked away wondering how things got so bad. It wasn’t as bad for her friend, Tomi who walked the same path in March this year. Tomi got her allocation of $4,000 without stress on the same day of application. “So, what is happening,” she asked herself.
Thousands of applicants go through this harrowing experience as they get their PTA in two or three tranches depending on what is available in the banks’ vault. Some get $1,000, $2,000 or more and are asked to access the balance in their dollar debt cards, which are usually not enough for their spending needs abroad because of banks’ spending limits.
Some applicants for PTA have, however, found ‘smarter’ ways of getting their dollar supply by having multiple applications in different banks thus challenging the effectiveness of commercial bank measures at rationing.
What bank staff are saying
- Bank sources confirm that customers like Debra indeed, spend weeks to get their full allocation of PTA after application and that the banks just can’t help the situation given the rush for PTA and the scarcity of dollars. “There is a long queue of applications that we have to deal with,” one customer service officer said at the Gwarinpa, FCT branch of a bank.
- Another source, a senior manager with a bank that recently got a national license said the measures are designed to checkmate speculators. “You know a lot of people now trade in the dollar”, he said.
- He explained that it is suspected that people get these allocations at the official rate of N420 only to turn around to “go and engage in arbitrage activities”. By that, he means that after getting their dollar allocation at N420, they sell for N720 at the black market thus making a margin of N300. A quick calculation shows that a smart Alec can stash as much as N1.2million from his $4,000 PTA allocation on a margin of N300 to the dollar.
CBN’s position on the matter
Efforts to get the CBN to comment on the rationing by banks failed as officials declined calls put through to them. Neither did they respond to WhatsApp messages sent to them. What is clear though is that the CBN had in February given clear directives on PTA allocation.
- In a February 20th release titled, Guidelines for the operationalisation of the new policy on PTA and school fees, CBN said that each qualified applicant is entitled to $4,000.
- The directive is to increase foreign exchange availability in the Nigerian Foreign Exchange Market
- To ease the difficulties encountered by Nigerians in obtaining funds for some invisible transactions
But before the February directive, in March 2017, the CBN committed to meeting all forex needs of Nigerians thus directing that all banks should introduce Teller Points to ensure that customers can access forex. This is also as directed that all banks must display electronic boards displaying the prevailing market rates of forex to ensure transparency of their dealings.
Banks were further directed to meet all PTA needs within 24 hours of application and respond within 48 hours if the application was in respect to paying school fees and medical bills.
Unfortunately, bankers and customers found ways to exploit the system by presenting fake travel visas and cancelling air tickets soon after allocation. The practice was so prevalent that the CBN threatened to publish the names of defaulters.
Forex supply
Meanwhile, Nairametrics reports that forex supply surged by 222.3% on Monday, August 22 to $161.94 million from 50.22 million that exchanged hands in the previous trading session. If anything, it suggests CBN’s determination to meet supply needs.
The 420 NGN to one dollar rate is very laughable going by the acuteness of the scarcity and paucity of export earnings. The federal government should please do the needful and devalue the local currency accordingly to stop all these dollar madness.