CBN Exposes People Responsible for Naira Crash, Bars them from Leaving Nigeria
Recent reports indicate that the Central Bank of Nigeria (CBN) has implemented travel restrictions on prominent bank executives and top officials within the country, effectively preventing them from leaving between August 5 and August 15, 2023. This move has been prompted by alleged foreign exchange misconduct.
Sources reveal that these bank CEOs and managing directors are suspected of engaging in unauthorized trading of foreign exchange, which subsequently exacerbated the scarcity of forex and resulted in a significant rise in the value of the US dollar against the Nigerian naira. It has been uncovered that these officials allocated substantial amounts of foreign exchange to their families, associates, and close contacts.
The situation arose in the aftermath of a decision to unify exchange rates, causing bank leaders to sell foreign currency at inflated prices. This reportedly benefited the CEOs significantly, allowing them to freely manipulate and profit from the exchange rates. These practices of directing forex to personal connections are believed to have contributed to customer difficulties in accessing cash and foreign exchange, adding to the delays experienced.
The report suggests that the central bank had initially allocated foreign exchange to these banks, but rather than facilitating legitimate transactions, the bank CEOs and senior executives indulged in activities such as round-tripping and money laundering, contrary to ethical standards.
The temporary travel ban imposed on these individuals was not intended as a punitive measure but rather as a call to fulfill national responsibilities.
Read Also : Stanbic IBTC Bank Announces Name Change
In earlier circumstances, the CBN provided weekly forex allocations to commercial banks to cater to legitimate needs, with a plea for fair transactions and minimal paperwork in the acquisition of foreign exchange from banks. The banks were granted 48 hours to settle customer forex requests, and they were instructed to establish dedicated branches across the nation for forex-related services.
Despite these guidelines, the banks apparently extended the processing duration for accessing forex needed for international school fees, lengthening the waiting period from 48 hours to an astonishing 120 days—contravening the CBN’s foreign exchange policy.
The implementation of the travel restrictions appears to have stabilized the depreciation of the local currency against foreign counterparts. Notably, the surge of the Nigerian naira against the US dollar has been witnessed in both the official and parallel markets. On August 21, 2023, the naira stood at N739 against the official dollar rate at the Investors and Exporters (I&E) window, while reaching N860 at the parallel market.
It’s important to note that these events occurred amid the Nigerian National Petroleum Corporation’s (NNPC) $3 billion loan from AfreximBank, aimed at combating the foreign exchange crisis, and the CBN’s commitment to intervening to counteract speculative activities. Despite these actions, when approached for comment, the CBN’s spokesperson, Isa AbdulMumin, expressed unawareness of the travel restrictions, indicating potential internal communication issues.
