CBN’s Discriminatory Exchange Rate Policy Killing Economy—Nwaka
By Ahmed Rahma
A former Senator, Mr Emma Nwaka, has frowned at the discriminatory exchange rate policy of the Central Bank of Nigeria (CBN).
The former lawmaker, who represented the people of Abia North Senatorial District at the National Assembly in the third republic, described this policy as draconian, noting that it was injurious to the economy.
According to him, a few people in the country are benefiting from this system because the apex bank has decided to give forex to some sectors at a lower rate.
Mr Nwaka argued that if the exchange rate is in favour of any sector or individual, it encourages round-tripping, a sharp practice where the favoured individuals simply collect their allocation of forex at a cheaper rate from the CBN and sell them off at a higher rate to bureaux de change (BDC), thereby making huge profits without stress.
He advised the central bank to stop this practice and formulate proactive policies that would restrict the free fall of the Naira against Dollar to save the Nigeria economy from further collapse.
However, he commended the CBN for the new policy on remittance in dollars, emphasising that it is more beneficial to both the Nigerian economy and the individual beneficiaries.
The apex bank had stated last week that remittances from overseas “shall henceforth be received by the beneficiaries in the currency of its place of origin.”
According to Mr Nwaka, the new policy has put an end to beneficiaries receiving the equivalent amount sent in Naira and intermediary banks later trading the foreign currency to generate revenue.
“Before now, we had a situation where when your relatives abroad send you money via Western Union or any other outlet, your bank in Nigeria gives you the equivalent of the amount sent in our local currency, thereby short-changing our economy by checkmating foreign currency inflows.
“Nigerian banks turn around to trade with the FX to boost their revenues and yearly profits,” Nwaka said.