Recall that the Economic And Financial Crimes Commission (EFCC) late last month, and in August, stormed some hubs of Bureau De Change (BDC) operators in Abuja, Lagos, and Kano, in what sources disclosed was a convert operation to dislodge currency speculators who are alleged to be massively mopping up available foreign currencies.
Some operatives of the commission have also been spotted at major airports in the country, all in a bid to ensure that the naira regains its strength and also puts an end to FX scarcity in the country.
Well, such operations carried out by the commission, have so far not yielded positive results, as the naira inches towards N700/$1 barely three weeks after the EFCC stormed Bureau De Change hubs across several locations in the country.
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The EFCC Chairman Abdulrasheed Bawa disclosed that through the commission’s intervention, they are working relentlessly to ensure that the naira remained relatively stable.
In his words;
“From well over N710 to the dollar, following the commission’s intervention, the naira has appreciated significantly against the dollar in the parallel market, and we are not relenting in our efforts to check harmful speculative activities in the sector”.
Reacting to the raid by the EFCC on Bureau De Change hubs, a member of the Association Of Bureau De Change Operations of Nigeria (ABCON), who pleaded anonymity during an interview, disclosed that ABCON was surprised that the EFCC could attempt to force members of the association to trade FX at a particular rate.
He further revealed that such a move by the EFCC was flawed, due to the fact that the FX rate is determined by market forces, also considering the fact that there is current scarcity of FX, it is only normal for the naira to fall.
See what he said;
“We do not print dollars in Nigeria. Everyone knows that there is a scarcity of dollars at the moment, so the demand will push up the rate. I really don’t know why the EFCC believes we are the ones that determine the exchange rate. Dollar would continue to rise, since there is a fresh demand for FX by summer travelers, including students and tourists”.
Few analysts have also described the EFCC’s move as a weird approach, stating that it is not the duty of the commission to stabilize the naira.
The continuous depreciation of the naira to dollar, has generated lots of talking points from financial analysts, economists, and individuals from all works of life, forecasting that the naira could fall to N1,000 before the end of the year if care is not taken.
The CBN on the other hand has disclosed that it is working hard to solve the issue of FX. Recall that the Apex bank last year banned Aboki FX, an online platform that publishes the unofficial rate of the naira to other currencies. However, despite this ban, FX scarcity persists.
Nigeria is reportedly experiencing one of its worst FX crises in history due to increasing demand for FX amidst low supply.
Despite the high oil price, caused by the Russia-Ukraine war, Nigeria ironically failed to benefit from it, due to limited production, and the maintenance of a subsidy regime, which is estimated to cost the country at least N4trn this year, despite being Africa’s largest producer of crude oil.
These high oil prices imply an increased cost of refined products and Nigeria continues to spend a huge part of its FX earnings on the importation of Petroleum Motor Spirit (PMS) and other refined products due to the complete absence of local refining capacity.