The Central Bank of Nigeria (CBN) has issued a stern warning, stating its intention to deal with the issue of commercial banks involved in the illicit trading of foreign exchange.
This comes in response to the recent depreciation of the naira, which has reached over N950/$ on the parallel market, further exacerbating the scarcity of foreign exchange. There have been allegations that some commercial banks are diverting foreign exchange to the unofficial market instead of serving their clients.
Acting CBN Governor, Folashodun Shonubi, conveyed this message during a lecture titled “Diaspora Remittances and Nigerian Economic Development” held in Abuja. Shonubi stressed the need for stringent measures to curb illegal remittances and direct them through proper channels to optimize economic growth.
“We must identify and expose commercial banks engaging in such illicit activities,” he declared.
Shonubi further highlighted the drawbacks of the current remittance system, where he estimated that the cost of transferring money to Sub-Saharan Africa from the diaspora stands at approximately 9 percent of each $100, making it the highest in the world.
He also noted that despite Nigeria receiving around $16.7 billion in remittances, the majority of these funds are being channeled outside the official foreign exchange market.
“We are diligently working to encourage individuals to utilize formal channels for their transactions, rather than relying on informal avenues that are challenging to regulate,” Shonubi emphasized.
The CBN leader acknowledged the efforts made to incentivize individuals to participate in formal market transactions, such as the Naira 4 Dollar scheme that granted a N5 refund for each dollar transaction. However, due to limited effectiveness, the N5 rebate has been discontinued. Shonubi recognized the importance of incentives in attracting people to engage in formal market activities.
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