Forex restriction: Nigerians groan as prices of items rise • CBN may stop selling dollars to BDCs soon

The Central bank of Nigeria (CBN)’s policy which restricts foreign exchange (forex) sales to importers of some products is causing poor Nigerians more pains as prices of those goods have risen in the market.
Though analysts applaud the move that will eventually make Nigeria and Nigerians to look homeward instead eye imported goods all the time. They however expressed fears that the policy may be in the long-term benefit the Nigerian economy, the apex bank should have thought of the short-term pains it would cause Nigerians in the lower wrung of the ladder.
Nigerians, especially dealers in commodity have expressed misgivings over the decision of the Central Bank of Nigeria (CBN) to restrict Forex supply to importers in other to encourage local production of goods.
Mr. Patrick a trader at Ogba who sells generators and refrigerators said that as at last month, the price of a refrigerator was N34, 000 but has increased by N3, 000. While Elepaq generator which was sold for N35, 000 just last month is now N40, 000 because of the new policy by CBN.
Another trader, Bola, who sells food items at the market, said she now has few customers because most complained about the sudden increase in the prices of goods. “ Before the policy, I used to sell a bag of rice for N8,500 but now the same bag goes for N9,000, while Tropical oil that I sold for N3,500 just last month has increase to N4,000.”
The Central Bank Governor, Godwin Emefiele had sometimes ago announced a restriction on forex supply to importers. According to the CBN boss, the only thing that will reduce pressure on our currency is by producing those things we are importing.
Speaking on the development, the Vice-President of Nigeria Association of Chambers of Industry mines and agriculture, NACCIMA, Dele Oye said the decision is for the greater good of the country.
According to him, it will help to consolidate on the nation’s advancement in local production of certain agricultural products like rice, poultry, vegetable oil, sugar, tomato, textile products etc.
“Although some of the big traders will be affected by the policy, it will actually do more good to the nation’s economy by helping to reduce the pressure on the Naira, and also provide a good price advantage for locally made goods in the market helping locally produced rice, cement and vegetable oil for example to compete better from import.
There are indications that the Nigerian central bank may stop selling foreign exchange to Bureau de Change (BDCs) if the leakages inherent in them are not corrected soon.
The central bank is very bitter that businessmen and women from Ghana and other neighbouring African countries have cashed in on the loopholes in the Nigeria system to buy foreign exchange from Nigerian BDCs, sometimes to the tune of over $1 million.
The Director of Monetary Policy of the Central Bank of Nigeria, CBN, Mr. Moses Tule, disclosed in Calabar last week that Ghanaian businessmen and other African countries are invading the Nigerian foreign exchange market.
He disclosed this at a seminar organised for financial journalists in Calabar, Cross River State.
According to him, nationals from other African countries even as far as Central African Republic come to Nigerian Bureaux de Change for forex which was partially responsible for high demand for hard currencies at the nation’s foreign exchange market.
His words: “Ghanaian businessmen and even people come from Central African Republic to demand for forex in Nigeria. They go to the BDCs to buy whatever they can get at any rate. That is why we have asked that the BDCs should request for BVN of those to whom they sell forex and file the documents but they are not filing. The predators even demand for as much as $1 million from BDCs in Nigeria. This cannot happen in other countries.”
Tule said there must a measure of patriotism in the efforts towards a stable macro-economic environment in the country and that stakeholders in the financial industry must work with regulators interest of the economy.
The director noted that the level of frivolous forex demand was unsustainable and unacceptable.
He said Nigerians must support the CBN in blocking wastage of the nation’s foreign exchange on items that could be produced locally.
In his remarks, former Director of Research in the CBN, Mr. Charles Mordi, argued that there was no other country in the world were government finances BDCs.
He noted that the initial reaction could be that some people, especially the BDC operators, will protest but that in the end all Nigerians would gain from the policy.
The Governor of the CBN, Mr. Godwin Emefiele had also two weeks ago noted that there was no other country in the world where a central bank funds BDCs.
The Director of Monetary Policy of the Central Bank of Nigeria, CBN, Mr. Moses Tule, disclosed, yesterday, that Ghanaian businessmen and other African countries are invading the Nigerian foreign exchange market.x
He disclosed this at a seminar organised for financial journalists in Calabar, Cross River State.
According to him, nationals from other African countries even as far as Central African Republic come to Nigerian Bureaux de Change for forex which was partially responsible for high demand for hard currencies at the nation’s foreign exchange market.
His words: “Ghanaian businessmen and even people come from Central African Republic to demand for forex in Nigeria. They go to the BDCs to buy whatever they can get at any rate. That is why we have asked that the BDCs should request for BVN of those to whom they sell forex and file the documents but they are not filing. The predators even demand for as much as $1 million from BDCs in Nigeria. This cannot happen in other countries.”
Tule said there must a measure of patriotism in the efforts towards a stable macro-economic environment in the country and that stakeholders in the financial industry must work with regulators interest of the economy.
The director noted that the level of frivolous forex demand was unsustainable and unacceptable.
He said Nigerians must support the CBN in blocking wastage of the nation’s foreign exchange on items that could be produced locally.
In his remarks, former Director of Research in the CBN, Mr. Charles Mordi, argued that there was no other country in the world were government finances BDCs.
He noted that the initial reaction could be that some people, especially the BDC operators, will protest but that in the end all Nigerians would gain from the policy.
The Governor of the CBN, Mr. Godwin Emefiele had also two weeks ago noted that there was no other country in the world where a central bank funds BDCs.

Leave a Reply

Your email address will not be published. Required fields are marked *