By Eniola Idris
The latest policy of the Central Bank of Nigeria (CBN), restricting sale of foreign exchange (forex) to Bureau De Change (BDC) operators, has triggered concerns among stakeholders in the shipping and manufacturing sectors.
Checks by SlyeNews revealed that the policy is already taking its toll as the exchange rate for dollars jumped from between N490-N500 per dollar, prior to the policy, to between N500-515 on Monday. Pounds jumped from N690-N700 to N705-N715, while Euro moved from N580-N595 to N590-N603 on Monday.
President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, told SlyeNews that the CBN is yet to get its policies right, hence it should go back to the drawing board to strengthen the policy to allow for seamless import procedures.
He said exchange rate is mainly for importation and we have to develop our economy because it is import-based. When you have removed 44 items from forex offer, and you asked them to go through other source, and you are now banning the other source. How will they be imported? Unless CBN gives banks authority to grant forex to those items.
“CBN should be able to balance its policies. They need to go back to the drawing board and perfect the system. This is an import-based country, if there is no importation, the economy will collapse.
“We have not developed anything over the years. Nigerian importers should be able to have access to forex. They need to strengthen the import policy. You cannot stop people from importing because you have not developed manufacturing sector, and the manufacturers are going through very difficult times at the moment,” he said.
Meanwhile, the President, Shippers Association of Lagos, (SAL) Jonathan Nicol, backed the CBN policy, saying it is a good signal for economic development of local industries and import sector, as the effect on ban of BDC will bring back the light of practice to the commercial banks as it is done in other countries that allows their citizens buy foreign currencies without stress and controlled prices.
Nicol stressed that while the BDC acted as an alternative, it became very expensive for importers, thereby making importation dwindled to a large extent.
On the effect of the new policy on the 44 CBN banned items, the SAL president said:
“We expect the CBN to help remove the ban on several other items under the Import Adjustment policies including the 44 items affecting Industries. The CBN can take a step further to encourage those who have foreign currencies abroad to help improve the economy of our country as countless restrictions have not benefitted Nigerians, but helped the Nigeria Customs to be dreaded in their own country.
“It is expected that there will be a lull initially as a result of slow takeoff by banks to effect the sale of forex to customers. It might induce some difficulties and inflation. With time, hopefully, it will blend to a management system,” he stated.
Former Director General of the Lagos Chamber of Commerce (LCCI), Dr Muda Yusuf, picked holes in CBN’s move, saying it was reacting to symptoms, rather than tackling the virus.
He linked the rough air currently experienced in the foreign exchange market to the CBN policy choice of a fixed exchange rate regime and administrative allocation of forex.
“It is a policy regime that has created a huge enterprise around foreign exchange – round tripping, speculation, over invoicing, capital flight etc.
“The action of the apex bank amounts to tackling the symptoms rather than dealing with the causative factors, which is not a sustainable solution,” he said.
The Central Bank of Nigeria (CBN) had last week stopped the sale of foreign exchange (forex) to Bureau De Change operators (BDCs) across the country.
CBN Governor Godwin Emefiele, who made the disclosure at the end of the monetary policy committee’s meeting in Abuja, said the BDC operators have become a channel for illegal financial flows, saying they have collided with corrupt people to launder money in Nigeria.
He said, henceforth, the apex bank would sell forex to deserving Nigerians through the commercial banks.
He said that the decision was informed by the unwholesome business practices of the BDCs, which he said had continued to put enormous pressure on the naira.
”The BDCs were regulated to sell a maximum of 5000 dollars per day, but CBN observed that they have since been flouting that regulation and selling millions of dollars per day.
“The CBN also observed that the BDCs aid illicit financial flows and other financial crimes. The bank has thus, decided to discontinue the sale of forex to the BDCs with immediate effect.
“We shall, henceforth, channel all forex allocation through the commercial banks,” he said.
He urged the commercial banks to ensure that every deserving customer got their forex demand, adding that any bank found circumventing the new system would be sanctioned.
