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CBN Bans Using Naira To Buy US Dollars in Nigerian Banking

CBN Bans Using Naira To Buy US Dollars in Nigerian Banking

“For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that,” Godwin Emefiele, CBN governor, said Tuesday at the Monetary Policy Committee (MPC) meeting in Lagos.

Indeed, Nigeria’s central bank has to play hail mary (as in American football) hoping for a touchdown. But most times, hail marys are intercepted or knocked down. In other words, they rarely work.

Criminalizing free market activities may not solve the root cause. Until the apex bank understands that only warehouses and factories (the old types and the new species) can save Naira, nothing will change. The power of Naira comes from Kano, Aba, Osogbo, etc and its improvement is in warehouses and factories, not in CBN headquarters or banks’ branches.

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As Naira falls to N625/$, we do not need threats. What we need is a plan. Part of that plan is even stopping the national grid from constantly collapsing (6th time already in 2022): “Major Nigerian cities including the Federal Capital Territory were thrown into darkness on Wednesday when the country’s electricity grid collapsed. Electricity distribution companies announced Wednesday that the collapse occurred at about 11:00 a.m. Wednesday’s incident is the sixth reported collapse in 2022.”

He asked Nigerians illegally exchanging naira for dollar to stop because the CBN would conduct investigations and bar those found culpable from conducting transactions in Nigerian banks.

In addition, he disclosed that the apex bank is keeping an eye on customers and banks, warning that it wouldn’t hesitate to sanction banks caught in illegal transactions.

The Central Bank needs support but it needs to focus on fixing the root causes even though most of these challenges cannot be solved by it alone. Without electricity, no one can light the Naira.

CBN Says It’s Illegal to Buy Dollar with Naira – Threatens to Sanction Banks, Arrest Customers


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15 THOUGHTS ON CBN Bans Using Naira To Buy US Dollars in Nigerian Banking

  1. But business that need FX shd not be prevented from having it by speculative actions of businesses that trade FX. Government need to do something about this.

  2. Another shot fired, and the target moved again.

    Hope Emefiele and his CBN have been able to arrest politicians who shared dollars to delegates, or has dollar become our national currency as well?

    41 items were banned from accessing dollars for importation, naira didn’t improve, but went further down, while price of goods climbed.

    It tried with N5 giveaway for every dollar remitted to Nigeria, and naira suffered more.

    It asked people to start receiving remittances in dollars, and the naira cried even more.

    It got angry with the BDCs and accused of distortions, then closed them down, and naira screamed and went into coma.

    It turned to crypto boys, bringing bombs to sticks fight, and everyone went into hiding, but naira remained battered.

    It remembered one website like that called AbokiFx and accused it of all naira’s suffering, and the small website changed course, but naira even stopped breathing.

    The problem with being led by directionless and tactless people is that even when they are making your life miserable, they are still telling you that if not because of their uncommon vision and peerless capabilities, you would have been cremated by now. Unfortunately, you cannot argue the improbable, and the delusion continues…

    • Good observations.

      If I may ask, in what currency does the Nigerian government sell crude oil?

      The last time I checked, Nigeria is the fifth largest exporter of crude oil in the world… how come the demand for the Nigerian naira has not increased?

      This is obviously because we sell this commodity in foreign currency, now how will the demand for the Naira increase if this continues? The government is only sabotaging its effort unknowingly or should I rather say “knowingly”?

      • The management of any economy has moved from the use of Executive fiat and Executive arrogance to achieve economic stability and economic progress. Mr Emefiele is not a fit and proper person to administer or manage any economy especially in a developing country

  3. We are looking for ways to add value to naira without considering
    1) torn N (10,20,50,100,) had no value in practical nigeria market
    2) agriculture had no advance equipments in most remute areas in nigeria while it is their major occupation
    3)educated youths of nigeria are allowed to compete with uneducated in terms of feeding money
    4)electricity is a foreign product in most agric base part of nigeria while population keep growing in cities
    5)the wealthy keep making others poorer with little or no surviving chance
    6)nigeria collect money from her citizens for education only to import foreign personnels to execute her projects

  4. The CBN governor should rather focus more on his job of engaging the government to effectively help manufacturers expand their businesses as well as stimulate more local production of industrial raw materials etc, instead of chasing shadows and making ridiculous threats. Why won’t there be huge pressure on the naira when most manufacturers are currently trooping to the parallel markets for dollars needed for importation of equipment and raw materials, due to inability of the CBN to meet their fx requirements??

  5. The CBN Governor needs to find ways to improve local production of all it consumes and appeal to Nepa to stabilize electricity in the country (to ensure local Industries thrive, while foreign companies remain operational on Nigeria). When a country imports most of its consumption, then it puts a lot of pressure on the local currency resulting in lots of problems such as the local currency is facing right now . CBN should also find ways and means to improve it’s exports such as Cocoa, natural gas etc to foreign countries to generate more foreign exchange. CBN Governor needs to convince the government to rehabilitate all of our refineries at home and stop refining our crude outside Nigeria. This will help Nigeria a whole lot if meaningful action is taken. Sorry I can’t supply my name, because the truth is always bitter in Nigeria.

  6. I believe the devaluation of the Naira has something seriously to do with those who fly outside the country every now and then for medical check up and all those saving in foreign Banks, I mean Naira that has been exchanged to be saved in foreign Banks. If the country’s refineries are not repaired and crude oil keeps on being refined outside the shores of the country to be imported back to the country, then that spells doom for the Naira.

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