In a statement released on Friday, February 23, 2024, the Federal Government of Nigeria disclosed that the country has recorded significant success on its ongoing reforms in the foreign exchange market, highlighting the stabilization of the naira and a surge of inflows into the forex market.
Mohammed Idris, the Minister of Information and National Orientation, reiterated the government’s commitment to tackling speculators and unscrupulous players undermining the naira.
According to Mohammed, the National Bureau of Statistics (NBS) reported a remarkable 66% increase in capital importation into Nigeria during the fourth quarter of 2023 compared to the previous quarter. He also noted that the new reforms had facilitated an inflow of $1.8 billion into the foreign exchange market in the previous week alone.
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The minister expressed satisfaction with the initial outcomes of these reforms, highlighting the stabilizing effect on the naira and the substantial inflows into the forex market. He quoted the CBN Governor’s acknowledgment of the $1.8 billion inflow as a direct result of the new reforms.
“The Central Bank of Nigeria (CBN) has been proactive in initiating comprehensive strategies to enhance liquidity in the forex market,” Mohammed stated. “In addition to unifying rates, the CBN has cleared a significant amount of outstanding Forex obligations and outlined new operational mechanisms for commercial banks, Bureau De Change (BDC) operators, and International Money Transfer Operators (IMTOs).”
However, Mohammed also acknowledged the resistance faced by the CBN’s efforts from speculators and other nefarious actors both within and outside the country. He emphasized the government’s determination to address these challenges through the concerted efforts of regulatory and enforcement agencies.
“To tackle this, regulatory and enforcement agencies of government have been working round the clock…to address these efforts at undermining the reforms,” Mohammed stated. “That strategic alliance has led to the intelligence-led identification, investigation, and sanctioning of individuals and organizations involved in illegal activities and sabotage within the forex market.”
Furthermore, he assured Nigerians of the government’s continuous efforts to stabilize the naira and safeguard the economy. He emphasized the need for patience and understanding during these challenging times and reiterated the government’s commitment to bringing relief and prosperity to all citizens.
“Nigerians should rest assured that the government will continue to take further steps to stabilize the naira and safeguard our economy. As the President never fails to emphasize, these headwinds we are facing are only temporary, and, collectively, we will surely overcome,” he said.
As part of its efforts to stabilize the naira, the government has also announced a clampdown on cryptocurrency exchanges operating in Nigeria. This includes the banning of popular platforms such as Binance and Coinbase. The move comes as part of broader measures aimed at curbing illicit financial activities and ensuring the stability of the Nigerian financial system.
The government cited concerns over the use of cryptocurrencies for illegal activities such as money laundering, fraud, and terrorism financing. Additionally, it expressed reservations about the lack of regulation and oversight in the cryptocurrency market, which could pose risks to investors and the broader economy.
In light of these concerns, the government has directed relevant regulatory bodies to take strict enforcement actions against cryptocurrency exchanges operating in the country. This includes the freezing of assets, the suspension of operations, and the prosecution of individuals involved in facilitating illegal activities through these platforms.
Although economic experts have warned about the potential implication of that move, the clampdown on cryptocurrency exchanges is expected to further bolster the government’s efforts to maintain stability in the forex market and safeguard the integrity of the naira. The government aims to create a more transparent, secure, and resilient financial environment by addressing loopholes in the financial system and cracking down on illicit financial activities.
Mohammed said ‘’The President and his team are and will remain resolutely committed and focused on the task of bringing immediate relief and enduring prosperity to all Nigerians.’’
The naira closed at N1571.31 against the dollar in the official market (NAFEM) on Thursday and traded at N1,750 per dollar during intraday in the parallel market on Friday.