The Central Bank of Nigeria (CBN) has threatened to sanction commercial banks engaging in illegal sales of foreign exchange.
This is coming on the heels of the crash of the naira to over N950/$1 at the parallel market as forex scarcity worsens and allegations that the deposit money banks are diverting most of their forex to the unofficial foreign exchange market rather than selling to their customers.
This was made known by the acting CBN Governor, Folashodun Shonubi, while delivering a lecture titled, “Diaspora Remittances and Nigerian Economic Development”, in Abuja.
Shonubi emphasized the importance of strict steps to restrict illegal remittances and channel them via appropriate means to maximise economic growth.
High cost of diaspora remittances to sub-Saharan Africa
Shonubi at the event announced the formation of a commission to pay unscheduled visits to banks accused of unlawfully selling dollars.
He said,
- “We need to name and shame commercial banks involved in such malpractices.’’
The acting governor also emphasized the shortcomings of the present remittance system, in which he estimated that the cost of transferring money to Sub-Saharan Africa from the diaspora at about 8–9% of every $100, which is described as the highest in the world.
He, however, noted that Nigeria received about $16.7 billion in remittances, with the vast majority of the money outside the official foreign exchange market.
Shonubi stated,
- “We are working hard to encourage individuals to bring money into the formal sector rather than relying on informal channels, which have become difficult to manage.’’
I&E window to be renamed
The CBN boss noted that despite efforts to induce individuals to engage in formal market transactions by granting a N5 refund through its Naira 4 Dollar scheme, the policy was still ineffective prompting the N5 rebate to be discontinued.
He, however, still acknowledged the usefulness of incentives in attracting people to the formal market.
He stated.
- “We will rename the foreign exchange market, known as the I & E market, to the Nigerian Foreign Exchange Market, as it is the sole market we acknowledge.”
The Commandant of the National Institute of Security Studies, Ayodele Adeleke, emphasized the relevance of the lecture series in extending the country’s awareness of security concerns. He stated that the series was one of the tactics embedded in the mode of the 10-month course to promote and give a focal point for the programme.
What you should know
In a related development, Shonubi attributed the crash of the naira against the dollar and its inability to manage the foreign exchange market to the diversion of diaspora remittances to unofficial markets like the parallel.
He explained that many diaspora remittances came to Nigeria in dollars and were not documented officially, as they end up in the parallel market.
He also noted that challenge with the unofficial market or parallel market is that because it is not regulated, it becomes an easy place to have criminal activities.
Diaspora remittances will not save Nigerian government and Nigeria from the shit the so-called rulers have plunged the country into for over 40 years.
Deal with the thieves in the government.
Deal with wastage in government.
Expand sources of foreign exchange.
These are not rock science.
Oil is overrated security and government officials have been reported to engage in oil thefts.
Shame on the government and the country..
May God in his mercy bless you my brother, u said what they don’t want to hear.
Diaspora remittances will not save Nigerian government and Nigeria from the shit the so-called rulers have plunged the country into for over 40 years.
Deal with the thieves in the government.
Deal with wastage in government.
Expand sources of foreign exchange.
These are not rocket science.
Oil is overrated.
Security and government officials have been reported to engage in oil thefts. What will the government do about it?
Shame on the government and the country for all the pain it causes Nigerians.
Why selling forex to unauthorised dealers? Can’t banks create platform to enable easy conversion of Naira to foreign currencies at the official single rate? This will automatically discourage blackmarketing currency. Just encourage customers to have domiciliary account
For instance, if I want $10 all I need to do is to do the transaction via my Bank App with my domiciliary account without patronising black marketers. This will eliminate this evil being papetrated by the middle men.
I rest my case.
Yes that’s the point
For those of us trading dollar based business to use the official channels like the dom account to transfer naira and buy dollar assets payable in dollar to us in Nigeria with our apps they refuse to give access I would have been bringing my profits in dollar pay to to my dom account but we have to use offshore account to collect our pay so many secrets in cbn and Nigeria politicians to abuse your money is what is available
The CBN observation is very correct among other factors of availability of enough Fx to meet the demand. Production and transparency in government dealings must be a priority. Oil theft and local refinery must be taken seriously.
The Central Bank and Commercial Bank are setting an anti financial policy that is inimical to the system. How will you order a student to pay 3 yrs taxes amounting to 480,000 before he can process Form A to Psy his school fees and most of this student took loan to study abroad they couldn’t afford and resolve to Black market and gave opportunity for commercial bank to odd it. Change this evil policy that is the only benefit students enjoy from this chronic government.
Na u wan go study abroad with this English when u confidently write here so????
So why can’t CBN totally scrap the unregulated parallel market?
Thanks for raising the point. If there is no black market to turn too, the banks will be forced to do what is right. And please the CBN should stop threatening the banks. Just sanction them and name those who are engaged in these economic sabotage.
Impunity for me, is the main reason bank officials would allegedly sabotage the country’s fx policy by selling to parallel market operators for personal benefits. If the CBN was dead serious about stopping the trend, it should sent secret monitoring teams to suspected commercial banks since, rather than merely barking about it. By now the CBN should have indicted some culpable banks and made example of them to deter others. And in my opinion, as long as this has not happened, it would continue to be business as usual for the crooked bankers and their associates in crime which may even include some top CBN officials. And the same impunity is also what I believe to be holding back progress in other aspects of the economy like oil thefts, electricity etc. I don’t think the average Nigerian truly grasps the level of rot and corruption in the system; it appears to be an all comers affair in most government offices, parastatals and related agencies mostly because the culprits believe they can get away with it.
What about the NNPC remittance? What about banks selling dollars to politicians?
You can not give what you don’t have. For any system to work you need honesty and credibility and these are values that we don’t have, hence we can not successfully manage any system.
Is there anything positive we do well in this country at all levels of our institutions? To my mind there is non and CBN can not be an exception.
You can not give what you don’t have. For any system to work you need honesty and credibility and these are values that we don’t have, hence we can not successfully manage any system.
Is there anything positive we do well in this country at all levels of our institutions? To my mind there is non and CBN can not be an exception.