10 January 2016, Abuja — As pressure continues to mount on the Central Bank of Nigeria (CBN) to reverse some aspects of its policy on foreign exchange, the apex bank governor, Godwin Emefiele, Saturday said no decision had been taken on the foreign exchange controls put in place last year as authorities were still weighing all options.
Reacting to speculations that the CBN might have bowed to pressures from the National Assembly, the International Monetary Fund and the organised private sector on the calls for the reversal of a cocktail of restrictions introduced into the foreign exchange market last year, Emefiele disclosed that such decision would only be taken after all options must have been effectively looked into.
The apex bank governor disclosed that the monetary authority was studying some of the recommendations in line with the directive of President Muhammadu Buhari to explore all options in addressing the current foreign exchange challenges.
“There is a range of issues we are looking at right now and I can assure you we will make our decisions public once we are ready,” Emefiele told our correspondent.
The CBN had on June 23 last year issued a circular excluding importers of 41 goods and services from accessing foreign currencies at the official foreign exchange markets. Following the various restrictions in the Nigerian foreign exchange market as well as the ban on the usage of naira denominated cards outside the country, some Nigerians had resorted to buying dollars from neighboring countries to be able to pay school fees of their wards schooling outside the country.
Calls for a review of policy was loudest from the camp of the organised private sector based on the adverse effect on their businesses.
The Lagos Chamber of Commerce and Industry in its New Year message had said, “Our stance is that we want the CBN to lift the ban on foreign exchange now because government needs to do something urgently to convince Nigerians, private sector operators and manufacturers in the New Year. We believe that removal of the ban on forex and adjustment of the exchange rate will make substantial impact on our economic recovery next year.”
Although areas to be largely affected by the anticipated policy shifts are sketchy, there were speculations that the policy on the total restrictions on naira debit cards abroad as well as rejection of dollar deposits in Nigeria are the key decisions in the upcoming review.
Sources said the pressure on the CBN gathered momentum during last week’s visit of the Managing Director of the International Monetary Fund (IMF), Christine Lagarde, when the issue of a flexible exchange regime was loudly canvassed by the IMF team and the leadership of the National Assembly.
A source at the meeting of the National Assembly with the IMF boss said members made the case for a review of foreign exchange rules in line with the call of IMF chief, whose visit was regarded as a big boost for the administration of President Muhammadu Buhari.
The source disclosed that having discussed the growing protest of Nigerians over the tightening of foreign exchange policy at both the committee level and on the floor of the Senate, the Senator Bukola Saraki-led chamber decided to swing into action by securing the commitment of the apex bank to revisit the issue.
after the naira plunged to a record low in December, following a drop in oil revenue.
Lagarde, on the third day of her four-day working visit to Nigeria, said during an interactive session with members of the Senate at the National Assembly complex in Abuja that additional exchange rate flexibility, up or down, could help soften the impact of external shocks on the nation’s economy, make output and employment less volatile, and help build the external reserves.
She said, “It (exchange rate flexibility) can also help avoid the need for costly foreign exchange restrictions, which should, in any case, remain temporary.”
“And going forward, improved competitiveness from improved exchange rate flexibility and other reforms will facilitate the needed diversification of the exports base and, ultimately, growth.”
*Festus Akanbi – Thisday