Amid concern in some quarters over its restrictive foreign exchange policy, the Central Bank of Nigeria (CBN) has said some businessmen based in Ghana and other countries come to Nigeria to buy foreign exchange.
The Director, Monetary Policy Department at the apex bank, Mr. Moses Tule, said yesterday in Calabar at the annual seminar for finance correspondents and business editors that the businessmen were doing so because of Nigeria being a large forex market.
He said: “The businessmen believe that Nigeria, being a large market, has a lot of foreign exchange. So, they leave the countries where they have their businesses and come to this country to demand for forex,” he added.
Tule defended the regulator’s policy on foreign exchange, saying that with a limited stock of foreign reserves and the price of the country’s main export earner-oil- showing no sign of a significant recovery soon, the CBN had no choice but to embark on strict management of the reserves, which stood at $31.175 billion as at last Tuesday.
He said the CBN had, over the years, raised the alarm about the import dependent nature of the economy, stressing that what the apex bank was trying to do was to prevent the country from ending up like Zimbabwe, which allowed its currency to become so worthless that it had to abandon it for the United States dollar.
He said: “Unless Nigerians stop patronising foreign items such as tooth picks and learn to consume locally manufactured goods, we may soon not have a naira currency.” He cited Norway as an oil producing country that Nigeria should emulate in terms of how it conserves and manages its earnings from oil, saying that the Scandinavian nation has the world’s largest reserves of $1trillion.
He also urged Nigerians to critically study how Ethiopia, a country, which some years ago was known for famine and drought has become one of the fastest growing and productive economies on the continent. Tule said: “The only way you are not going to have a foreign exchange crisis is to change the structure of the economy; make it less dependent on oil.”
Urging journalists to step up their efforts in explaining the CBN’s forex stance to the public, the CBN director said there was a limit to which the banking watchdog could go in trying to ensure exchange rate stability. He said: “You can’t have macro-economic stability without macro and fiscal policies seeing eye-to-eye.” In his remarks at the seminar, which has as its theme, “The impact of crude oil prices on external reserves and exchange rate management in Nigeria”, CBN Director of Corporate Communications, Mr. Ibrahim Mu’azu, said the choice of topic for this year seminar was not only apt, but timely considering the recent dwindling global oil prices and its effects on the country’s economy.
“It has become imperative to direct our attention to this topical economic issue considering your role in enlightening and educating the general public with regard to measures that have been taken by the relevant authorities in dealing with the challenges of managing the country’s exchange rates and external reserves”, Mu’azu said.
The naira has stabilised at N197 against the dollar since the two previous devaluations, but has continued to depreciate at the parallel market, exchanging at N243 per dollar as at yesterday.
The persistent decline of the naira in the parallel market stemmed from the introduction of new measures by the Central Bank last month, restricting access to hard currency at the interbank market in a bid to conserve the foreign exchange reserves.
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