CBN vows to crack down on offenders of illegal forex trade
By Felicia Nwosu
Folashodun Shonubi, the acting Governor of the Central Bank of Nigeria (CBN), has fumed over the actions of some of the banks engaging in illegal sales of forex, and vowed to crackdown on offenders.
He reaffirmed the importance of strict steps to restrict illegal remittances and channelling them via appropriate means to maximise economic growth. The Acting apex bank boss made this statement during a lecture titled: “Diaspora Remittances and Nigerian Economic Development”, in Abuja.
Threatening to launch tougher restrictions to curb the menace, he said plans are underway through the formation of a commission that will pay unscheduled visits to banks accused of unlawfully selling dollars. The financial leader also added that problems such as money laundering, trafficking in persons, goods, or services, are some of the challenges rearing their ugly heads against diaspora remittances.
“We need to name and shame commercial banks involved in such malpractices,” he stated.
The acting governor also emphasised 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 per cent of every $100, which is described as the highest in the world. He, however, noted that Nigeria received about $16.7b in remittances, with the vast majority of the money outside the legal market.
“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,” he stated.
He reaffirmed that various measures have been adopted as incentives to induce individuals to engage in formal market transactions by granting a N5 refund. According to Shonubi, such a reformative mechanism has failed to yield positive results, leading to the withdrawal of the N5 rebate.
“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.”
Also in another development, CBN explained that, following the Foreign exchange (Forex) inflows through the investors and exporters (I&E) window rose month-on-month by 23 percent to $1.41 billion in June from $1.14 billion in May 2023.
It stated that the total inflows into the I&E window rose to $2.55 billion in the months of May and June following the unification of exchange rates by the Central Bank of Nigeria. This is coming after the apex bank removed the multiple exchange rate system in the forex markets.
Recall that CBN lifted restrictions on foreign exchange trading in June which has seen the naira depreciate against the dollar during the period.
“The data indicated that inflows into the I&E window increased for the second consecutive month in June to $1.41 billion from $1.14 billion in May. “However, local inflow continued to sustain the market, hitting $1.11 billion in June because of higher inflows from non-bank corporates ($597.10 million) and exporters ($448 million).
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