By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has lamented that diaspora remittances entering the country do not enter the official market but instead find their way to unregulated markets.
This was made known by the acting Governor of CBN, Mr Folashodun Shonubi, while delivering a Distinguished Personality lecture titled: Diaspora Remittances and Nigeria Economic Development for members of Executive Intelligence Management Course (EIMC) 16 at the National Institute for Security Studies, Abuja.
Mr Shonubi explained that many diaspora remittances came to Nigeria in dollars and were not documented officially, as they ended up in the parallel market and the peer-to-peer (P2P) segment.
“With those remittances, the Dollars have come in. We know the dollars have come in, but we don’t see them in the official system. So, they must be going somewhere and somewhere.
“The challenge with the black market, unofficial market or parallel market or whatever name you want to call it, is that it is not regulated, and it becomes an easy place to have criminal activities.
“We investigate bankers, not just bankers, anybody who has committed an offence; the first thing they want to do is to run to the black markets, change it to the Dollars because it is less money to carry around.
“Some of the funding in the black markets are actually from diaspora remittances. That’s why it is important we need to know a lot of what’s going on there. We can’t play the sentiment game.
“If we don’t understand the dynamics, we usually go with the literature, which does not necessarily work for us.,’ he said.
Speaking of efforts to staunch the continued migration of remittances to these unregulated markets, Mr Shonubi said it would deepen its collaborations with banks and other institutions in the system.
“We intend to use more of the banking system too, sending money to Sub-Saharan Africa costs the highest because we don’t have masses. It would be helpful if we could work together to identify these channels.
“We just want the flows into the proper channels, there we can get maximum benefits to grow the economy. We talk about black markets, which also create problems.”
He added that the, “Management of foreign exchange market and the efficacy of our policies to manage the exchange rate becomes difficult due to the insignificance of our diaspora remittances which are going to other markets.”
He also tasked individuals to be upright when dealing in the market, saying many use smart moves to make profits and create unbalance.
“Since we started the I&E window, we found out that some people would deliberately wait until the last minute and do one transaction of $5,000, and that becomes the closing rate.
“We can’t do without diaspora remittances. For many countries, that’s their main source of income,” he lamented.
Modupe Gbadeyanka