The value of the Naira to the Dollar fell from 196.99 in December, 2015 to 410 in April, 2021, reflecting a 51.95 per cent decline despite the various foreign exchange policies introduced by the Central Bank of Nigeria (CBN) to strengthen the currency.
According to a monthly document obtained from the CBN’s website, the value of Naira at the inter-bank forex market stood at N196.99 as of December, 2015.
Last month, the CBN adopted the NAFEX exchange rate of N410.25/$1 as its official exchange rate, devaluing the Naira from N379/$.
In a move to achieve exchange rate stability and preserve the country’s forex reserves, the CBN in 2015, reviewed downwards the spending limit on the usage of Naira-denominated debit cards for transactions abroad.
In a circular issued in April, 2015, signed by the then Director of Trade and Exchange, Olakanmi Gbadamosi, the bank said the limit had been reduced from $150,000 to $50,000 per person annually, while daily cash withdrawals per person was pegged at $300.
After six months of implementing the policy, the value of Naira in the official window remained stable at 197/$, but fell from 210/$ to 258/$ at the parallel market.
In June, 2015, the CBN announced that it was stopping the supply of forex to 41 items that could be easily produced in Nigeria, a development that brought about the forex exclusion policy.
The implication of the policy is that importers of items on the forex restriction list would not be able to get forex directly from the windows created by the apex bank to bring the products into the country.
A circular issued by CBN said, “The implementation of this policy will conserve foreign reserves as well as facilitate the resurrection of domestic industries and improve employment generation.”
However, after about a year of implementation, the value of Naira plummeted at both markets, falling from 197/$ to 232/$ and 218/$ to 351/$ at the official and parallel markets, respectively.
In 2017, the exchange rate at the official window fell to the N300/$1 threshold, ranging between N305 to N306 to a Dollar.
This was despite the introduction by the CBN of a new window for investors, exporters and end-users aimed at driving liquidity in the forex market.
From January, 2020 to April, 2021, the Naira continued in a downward trend at both markets, falling from 307/$1 to 381/$1 in the official window and 361/$1 to 481/$1 at the parallel market.
Within this period, the CBN adopted new forex rules.
For instance, in November, 2020, the bank announced that recipients of Diaspora inflows could receive their funds in foreign currency or have it transferred to their domiciliary accounts where they also have options to withdraw in cash or transfer.
In March, 2021, the CBN introduced an incentive of N5 for every $1 of fund remitted to Nigeria through International Money Transfer Organisations, as part of its reforms to boost the inflow of foreign currency in the country.
The incentive was termed ‘Naira-4-Dollar scheme’.
Speaking on the CBN policy, an economist and the current Chairman of Foundation for Economic Research and Training, Prof. Akpan Ekpo, said the idea behind the Naira-4-Dollar scheme was to shore up the exchange rate.
Responding to a question on why the Nigerian forex continued to depreciate despite the policies, an investment strategist at Afrinvest, Omosuyi Temitope, said, “The reason the policies are failing is because they are makeshift policies; they can’t address the fundamental factors that have kept the Naira under water.
“The major factor that needs to be addressed is the external trade condition – that is the current account; so long as the Nigerian current account continues to suffer major setback, particularly when we have huge imports over exports, then Naira will remain likely subdued.
“Between 2018 and 2020, for instance, we have continued to witness consistent deceleration in the current account balance; last year alone, the current account balance was negative, $17billion, from about $14billion in 2019.
“We also saw the performance of the foreign reserve; as a result of deceleration in current account, foreign reserve also went down, and in the last few months, foreign reserve has continued to plummet. So, if we don’t address our external trade position – that is, if Nigeria doesn’t export enough to get foreign earnings, we will continue loss in terms of Naira depreciation.”
He added Nigeria must produce sufficiently to meet local demand in order to reduce the Dollar demand for importation of consumer goods.
FG Moves To Stop Influx Of Illegal Aliens
The Federal Government has promised to put measures in place to end the movement of illegal immigrants into the country to secure the country.
The government stated that the era where aliens easily enter the country with fake travel documents must stop.
The Minister of Interior, Olubunmi Tunji-Ojo, according to a statement on Saturday by the Director of Press of the Ministry, Afonja Ajibola, disclosed this when the Director, the Bureau of Public Service Reforms, Dasuki Arabi visited him.
The statement read, “The Minister assured he is working seriously on efficient ways at securing Nigeria borders; saying a situation where illegal aliens easily find their ways into the country often with fake travel documents has to be stopped. In his view, Nigeria cannot be secured if its borders are not secured”.
The Minister also said the Ministry was ready to partner with the BPSR in proffering effective solutions to the nation’s security challenges, especially in securing the nation’s borders.
“I am ready to actively collaborate with the Bureau of Public Service Reforms to find solutions to our security challenges,” he was quoted as saying.
ECOWAS Condemns Plot To Obstruct Peace In Sierra Leone
The Economic Community of West African States (ECOWAS) has condemned the plot by some individuals to disturb peace in Sierra Leone.
The condemnation is contained in a statement issued by ECOWAS in Abuja, yesterday.
ECOWAS said, “The bloc has learnt, with utter disgust, a plot by certain individuals to aquire arms and disturb the peace and constitutional order in Sierra Leone.
“ECOWAS condemns this act and calls for the arrest and prosecution of everyone involved in the illegality.
“The bloc has always maintained its zero tolerance for unconstitutional change of government.
“We want to reaffirm our commitment to supporting the government and the people of Sierra Leone’s quest to deepen democracy and good governance by consolidating peace and security so as to foster socio-economic development”.
Earlier, the Sierra Leonean Government had declared a 24-hour nationwide curfew in a proactive step to ensure that the peace is not tampered with.
Bad Roads Fuelling Insecurity In N’East -Govs
Worried by the security challenges confronting the region, governors of the North East have resolved to embark on more collaborative efforts among member states to come up with a security architecture design for the region.
The governors noted that bad federal roads are fuelling insecurity in the region and called on the Federal Ministry of Works to follow through with road contracts awarded in the region.
This is contained in a communique issued at the end of the 9th meeting of the forum, held at the banquet hall of the Adamawa State Government House in Yola last Saturday.
According to a statement signed by the Chairman of the Forum and Governor of Borno State, Babagana Zulum, the forum said there was a need for a robust platform for regional economic development and resolved to work as an entity in strengthening the human capacity and socio-economic development of its people.
The communique read in part, “Forum is continuously disturbed about the poor infrastructural base of the region. More concerned that the federal roads within and between the states in the region have been neglected.
“We call on the Federal Ministry of Works to follow through with road contracts awarded in the region. The poor road network is fuelling insecurity stalling development and making life more difficult for our people in the region.
“Forum notes that the bad federal roads within and between the states are major setbacks to the infrastructural development of the region.
“Forum notes the poor energy situation in the region. To mitigate the situation, Forum resolved to work with Shanghai Electric to construct a 60 MW Coal Power Power Plant in each state of the region.
“Forum decried the lack of modern rail projects in the region and called for repairs on the old gauge rail lines which no longer useful and sustainable technology. Forum calls for inclusion of the region into the Nigerian National Railway Transport Plan using the Modern Guage rail.”
On climate change and environmental degradation, the forum resolved to strengthen its collaboration with all initiatives such as the Great Green Wall and the Global Initiative of Carbon Credit financing.
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