The Nigerian Senate has made a resolution, Wednesday, to summon the Governor, Central Bank of Nigeria to educate and inform senators about the cause of the swift devaluation of the Nigerian Naira.
It also gave the directive that the Senate Committee on Banking, Insurance and other Financial Institutions should assess the impact of the Intervention funds of the Central Bank which was meant to support critical sectors of the Nigerian economy.
The Senators arrived at the resolutions after the upper chamber considered a motion titled ‘State of the CBN Intervention Funds and Free Fall of Naira’, which was sponsored by Lawmaker representing Ekiti North, under the aegis of the ruling All Progressives Congress (APC), Senator Olubunmi Adetunmbi.
Adetunmbi, who came under Order 41 and 51 of the Senate Standing Order, as amended, bemoaned the economic reality of the country and made an urgent call for what it termed, ‘extraordinary measures’.
He stated that the Central Bank of Nigeria provided special funds to support critical sectors of the economy, through its various multi-sectoral intervention funds and maintained that it was highly necessary to take a good look at the state of implementation and effectiveness of the funds deployed for that purpose, with regards to such interventions.
Senator Adetunmbi also noted that in 2021, the apex bank placed an indefinite ban on foreign exchange bidding by bureau de change operators and importers over allegations of abuse and mismanagement. He observed that the resultant effect of that ban by the Central Bank was a high rise in the exchange of the Nigerian Naira.
The lawmaker reiterated thus: ‘The two instruments of Personal Travel Allowance and Business Travel Allowance could only serve less than 20% of the total forex demand by travelers and businesses.’
He raised his concerns that the import and export channels created to satisfy the forex needs of business giants ‘has become a rare opportunity that only a privileged few can assess’, adding that these and some other factors have given rise to the excessive scarcity of forex in the country today.
He further noted that the exchange rate in the autonomous segment of the foreign exchange market as of Tuesday, July 26, 2022 was N670 to one United States dollar and was projected to end at N1000 by the end of the year, judging from the current rate at which the Nigerian Naira depreciated.
He advised the apex bank to arrive at new measures to stop the scarcity of foreign exchange, while addressing the falling rate of the Nigerian Naira exchange.
On his part, Lawmaker representing Niger-East, Senator Sani Musa of the APC, condemned the CBN’s decision to stop Forex biddings, which in turn, cut off the Bureau de Change operators, stressing that the CBN’s continued exclusion of the BDCs in the bid to have control over the value of the Nigerian Naira will only lead to its further depreciation. He advised them to take the better option of seeing to the regulation and monitoring of the parallel market.
His words: ‘What CBN used to do was to give out $10,000 to each of these BDCs with a clear directive for it not to be sold above N470 as against the $419 exchange rate. It worked.’
‘But today, nobody is determining where the rate is going and I can assure you we can’t have that solution because we are only importing,’ he said.
The lawmakers called on the CBN for a quick intervention to stop the rapid decline of the value of the Nigerian Naira against the dollar and other currencies.