In a move to reduce the pressure on the naira, the Economic and Financial Crimes Commission has raised a 7,000-man special task force across its 14 zonal commands to clamp down on dollar racketeers.
In a statement on Wednesday in Abuja, the spokesperson for the anti-graft agency, Dele Oyewale said the commission had summoned the proprietors of private universities and other schools charging tuition in dollars.
The naira has been on a free fall against the dollar in the past weeks with the currency losing value against the greenback.
In the past weeks, the naira had plunged from about 900/dollar to over 1,400/dollar at the official market.
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, who appeared before the House of Representatives on Tuesday, disclosed that Nigerians spent $98 billion in 10 years on foreign education, healthcare and personal travels, which had impacted the naira.
He spoke against the backdrop of the central bank’s battle to stabilise the exchange rate amid dollar shortage.
Cardoso argued that the foreign exchange market was facing increased demand pressures, causing a continuous decline in the value of the naira.
According to him, factors contributing to this situation include speculative forex demand, inadequate forex due to low remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.
To address exchange rate volatility, he said a comprehensive strategy had been initiated to enhance liquidity in the forex market.
This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureau De Change operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.
Cardoso revealed that between 2010 and 2020, foreign education expenses amounted to a substantial $28.65 billion, as per the CBN’S publicly available Balance of Payments Statistics.
Similarly, medical treatment abroad incurred around $11.01 billion in costs during the same period. Within the same period, Personal Travel Allowances accounted for a total of $58.7 billion.
Cumulatively, Nigerians spent about $98 billion on foreign trips, medical tourism and overseas education, a figure the CBN governor said was more than the total foreign exchange reserves of the central bank.
According to Cardoso, further compounding the situation, has been the consistent decline in Nigeria’s export earnings against the backdrop of increasing imports.
In contextualising the problem, Cardoso pointed out that Nigeria’s annual imports, which require dollars for payment, amounted to $16.65 billion in 1980.
Worried by the development, the Finance Minister and Coordinating Minister for the Economy, Wale Edun, had last Friday met with the CBN Governor and the EFCC Chairman, Ola Olukoyede, to proffer solutions to the naira crisis.
According to a statement by the Federal Ministry of Finance, the meeting was to strategise on stabilising the beleaguered currency.
“This afternoon at Finance HQ, HM Finance & Coordinating Minister for the Economy, Wale Edun, EFCC Chairman Ola Olukoyede and CBN Governor Olayemi Cardoso, engaged in a strategic discussion focused on enhancing the efficiency of our financial system and stabilising the naira’’, the finance ministry posted on its X handle.
To strengthen the national currency and stabilise the nation’s volatile exchange rate, the CBN directed Deposit Money Banks to sell their excess dollar stock latest 1 February 2024.
The CBN, which made the disclosure in a new circular released last week Wednesday, also warned lenders against hoarding excess foreign currencies for profit.
According to officials, the central bank believes some commercial banks hold long-term foreign exchange positions to enable them to profit from the volatile movements of exchange rates.
The new circular introduces a set of guidelines aimed at reducing the risks associated with these practices.
In continuation of the targeted measures, the EFCC revealed it had set up a special task force to enforce the extant laws against currency mutilation and dollarisation of the economy.
It explained that it arrested some perpetrators issuing invoices in dollars and mutilating the naira in Lagos and Rivers States.
Oyewale said, “The EFCC has raised a special task force in all its zonal commands for the enforcement of extant laws against currency mutilation and dollarization of the economy.
“The taskforce, inaugurated by the Executive Chairman of the commission, Ola Olukoyede, was raised to protect the economy from abuses, leakages and distortions exposing it to instability and disruption
“Already, the commission has made some arrests of perpetrators of issuance of invoices in dollars and mutilation of the naira in Lagos and Port Harcourt.
