The Central Bank of Nigeria (CBN), on Tuesday, announced the cessation of forex sales to Bureau De Change (BDCs) operators.
CBN Governor, Godwin Emefiele, who disclosed the new policy after the July 2021, Monetary Policy Committee (MPC) meeting in Abuja, said the apex bank was funneling $5.7 billion (about N2.346 trillion) annually through the BDCs.
He said the $5.7bn allocated to BDCs has become unsustainable as $20,000 is allocated to over 5,500 BDCs in the country, amounting to $110 million per week.
Economists and financial experts interviewed by Daily Trust expressed mixed feelings about the new policy and its immediate and long term implications.
They predicted a shock that will further shot up the dollar rates at the parallel market, which will stabilise in the long run. They also blamed the CBN for the downside of the expunged practice.
Emefiele also said the CBN will no longer continue registration of new BDCs as subsequent forex will be channelled through commercial banks.
The CBN governor said as part of the new forex sales policy, all commercial bank branches will create a separate desk for the purpose.
“The BDCs were regulated to sell a maximum of 5,000 dollars per day, but CBN observed that they have since been flouting that regulation and selling millions of dollars per day.
“The CBN also observed that the BDCs aid illicit financial flows and other financial crimes. The bank has thus decided to discontinue the forex sales to BDCs with immediate effect.
“We shall, henceforth, channel all forex allocation through the commercial banks,” he said.
The apex bank head also urged banks to ensure that every deserving customer got their forex demand adding that any bank found circumventing the new system would be sanctioned.
“Once a customer presents all required documentation to purchase forex, the commercial banks should ensure they get the forex. Any customer that is denied should contact the CBN on 0700385526 or through the email- firstname.lastname@example.org.”
In another development, during the MPC press briefing, the CBN governor said the apex bank has continued to rev up interventions in the real sector to spur economic growth.
The CBN governor said the MPC meeting retained all existing monetary rates.
Other policies, interventions
Emefiele said “Under the Bank’s development finance initiatives, the Bank granted N756.51bn to 3,734,938 smallholder farmers cultivating 4.6m hectares of land, of which N120.24bn was extended for the 2021 Wet Season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme (ABP).”
He further stated that under the “Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), the sum of N121.57bn was disbursed to 32,617 beneficiaries, and for the Targeted Credit Facility (TCF), N318.17bn was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises (SMEs).”
Similarly, “Under the National Youth Investment Fund (NYIF), the Bank released N3bn to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs. Under the Creative Industry Financing Initiative (CIFI), N3.22bn was disbursed to 356 beneficiaries across movie production, movie distribution, software development, fashion and IT verticals.”
Under the N1tr Real Sector Facility, Emefiele said “The Bank released N923.41bn to 251 real sector projects, of which 87 were in light manufacturing, 40 in agro-based industry, 32 in services and 11 in mining.
“On the N100bn Healthcare Sector Intervention Facility (HSIF), N98.41bn was disbursed for 103 healthcare projects, of which, 26 are pharmaceuticals and 77 are in the hospital services.”
He also said, “The sum of N232.54m was disbursed to five beneficiaries under the CBN Healthcare Sector Research and Development Intervention (Grant) Scheme (HSRDIS) for the development of testing kits and devices for COVID-19 and Lassa fever.”