Nigerian businesses from manufacturers to importers, who have been on a long queue for dollars may have cause to heave a sigh of relief as the Central Bank of Nigeria (CBN) has announced plans to clear foreign exchange (Forex) backlog obligations in the next two weeks.
Acting Governor of the CBN, Adebisi Shonubi at a press briefing in Lagos, said the apex bank has taken concrete steps, working with local banks on various structures to expedite action and ensure that forex backlogs are cleared in the next two weeks.
This would help attract Forex inflow into Africa’s largest economy, improve liquidity in the Nigeria Foreign Exchange Market (NIFEX) window, increase in offshore participation and boost foreign investors’ confidence in the country.
Analysts have argued that the unification of all official Forex windows alone is not likely to be sufficient to unify all Forex rates in the economy and reduce/eliminate participation in the parallel market, especially if the Forex supply remains low, and existing backlogs are not cleared.
Shonubi said: “On the backlog, the local banks have been working with the CBN on various structures to clear it , as a matter of fact, there is a large amount of the obligations that the banks in Nigeria have already taken up.
“So what happened was that at maturity, they actually made the forex available for those who needed to use it like the importers. There are some customers who still have their own obligations and part of the restructuring with the banks in Nigeria is to also clear that backlog.
“It is something we have been discussing for a while. Today we still intervene in the market, it is not as if it has affected our ability to make monies available to banks in the NIFEX market but when we look at volumes, the CBN today contribute less than 25% into the forex market because the CBN do not want to be a regular player but more of intervening to stabilize the rate and that is where we are going,” he said.
According to him, volume of Forex currently available with the banks are quite significant, adding that it is almost three times what is currently in the CBN coffers.
In addition, Shonubi said Bureau De’ Change (BDCs) operators that fail to convert into electronic would be phased out of the system, adding that then system would not be heavily cash driven.
He said the measure would help to differentiate between the regulated market which is the BDCs as supposed to the ones the CBN does not regulate.
He said the CBN would clamp down on companies that collaborates with international agencies to brings dollar into the country illegally.
“There are quite a number of players out there that have been bringing in money and selling in less an official ways, those, who rather than bring in money through the normal system pass it through them and they will sell to Nigerian companies rather than doing the proper thing, they can expect to hear from us shortly,” he said.