It can be recall that in the year 2021, Central Bank of Nigeria under the leadership of Godwin Emefiele has put some restrictions to possession of forex unless to authorized personnel. The restrictions has also affected the Bureau De Change where they are no longer permitted to get the Forex Dollar from the Banks and also revoking some BDCs licenses.
Since then, Forex scarcity continues to emerge and Also causing the US dollar to rise against Nigerian Naira. Also as a result of the CBN policy on Forex, Inflation arises in Nigeria causing rapid price changes on most of commodity /market. Later the CBN lessen the policy but still that didn‘t yield a positive impact. Many Nigerian elders and and leaders has advised and summoned the CBN Governor to reconsider the policy among them is Olabode Agusto, founder of Nigeria’s first credit rating agency. Olabode recommends the CBN to take-off the the forex ban/ restrictions to BDCs and allow sells of Forex to them in order to lower the pressure in possessing Forex. He consider this as one of the way to reduce pressure in getting FX.
The statement was revealed during a webinar titled “Nigeria in 2022- Will 2022 Be a Year of Strong Growth Driven by Herd Immunity from COVID-19？” Also Agusto & Co, a credit rating agency, also Highlighted that if the CBN maintains its current stands not to sell dollars directly to the Bureau De Change (BDC) operators, the Naira to exchange rate would depreciate to N620/$1 in the parallel market before the end of 2022, as a failure to remove the restrictions.
He further describes that the Naira would continue to suffer in the parrel market if additional liquidity is not brought into the market through the BDCs. He said,
“We see continued pressure on the parallel market exchange rates. And the only way to reduce pressure in the parallel market is to throw money thereby selling dollars to the BDCs. If there is no additional funding to the BDCs from the CBN then the parallel market rate will be between N610 and N620 in 2022. It will be fueled by scarcity and the difference between inflation rates of the dollar and the Naira.”
Based on his forecast, the much-anticipated rate convergence in the foreign exchange market would take longer than expected since the central bank would be hell-bent on pegging the official rate.
He stated that a convergence would make Nigeria have a single exchange rate, where the parallel market premium is less than 3.0% of the official rate.
He also complained about the neglect of the growing Nigerian debts. Agusto said, “The federal government says ‘we don’t have a debt problem and that we have a revenue problem. But I disagree completely. We have a debt problem that we are not taking very seriously. We are taking it lightly.”
Regarding the CBN Ban, it Is important to note that
The CBN had directed Deposit Money Banks (DMBs) to set up teller points in designated branches for the sale of foreign exchange to meet legitimate forex requests.
Commenting on Nigeria‘s growing debts, Agusto said: “The federal government says ’we don‘t have a debt problem and that we have a revenue problem.’ But I disagree completely. We have a debt problem that we are not taking very seriously; we are taking it lightly.”
