For over five weeks now the Nigerian foreign
exchange system has been on drama sketch. It is
unbelievable that at a time of harsh economic
circumstances manifesting in the form of sharp
decline in foreign exchange earnings from oil
revenue, soaring inflation and interest rates, a slump
in gross domestic products (GDP), rising
unemployment, mounting salary arrears amongst
many economic woes, the banking industry is
complaining of excess dollar cash up to US$5 billion
(approximately N1 trillion) either stuck in some
people's hands or lying idle in bank vaults as a result
of a foreign exchange directive.
The Central Bank of Nigeria (CBN) had directed that
the banks should stop accepting dollar cash deposits
as the apex bank itself also stopped accepting same
from banks. Vanguard investigations revealed that
the policy was informed by CBN's findings that the
economy has been awash with alleged illicit dollars
which were probably being laundered through the
banking system.
The apex bank, in a statement, had noted with
concern a recent report by the Global Financial
Integrity Group, which ranked Nigeria as one of the
top ten countries for illicit financial flows in the
world. The report, though unconfirmed, estimated
that about US$15.7 billion of illicit funds go through
Nigeria's financial system annually.
Whilst we understand the concern of the apex bank
especially in the light of the negative image, we wish
to draw the economy managers' attention to the
other picture of the policy and call attention to the
need for a more productive policy option.
This idle foreign currency asset is more than the
annual incomes of six African countries put together
and more than the recurrent expenditures of about
14 states of Nigeria put together. It is enough to
provide employment for over four million graduates
if invested into the economy. Most pathetic is that
going by United Nations' assessment of the poverty
level in Nigeria, this amount is enough to feed over
20 million households in the low income bracket for
one year.
We challenge the economy managers to come up
with better, more creative options to bring the funds
into economic activities in the face of the cash crunch
being suffered by the larger economy and the
citizens.
We advocate that the monetary authorities apply the
several protocols on illicit fund flows, money
laundering and terrorism financing while ensuring
that legitimate foreign exchange deposits are allowed
with proper documentations.
Also the illegitimate foreign currency assets should
be pursued and recovered while offenders should be
prosecuted.
The valuable forex should not be abandoned in the
hands of a few individuals who might eventually
compromise the system while the assets end up in
their private accounts outside the country.
AbleMoJah® Nigeria.
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