By Sandy Abah
“Daddy, how many dollars, pounds, euros do you want? You want to buy or sell? I will give you good prices, walahi,” the roadside forex seller pitched.
“Ok, dollar is how much?”
“Daddy, buying or selling”
“Both. I want to know.”
“If you are selling, we will buy at N1,580, buying N1,650”
“Gaskiya ni?”
“Gaskiya ni! Walahi, I am telling the truth. How many dollars do you want to sell or buy…”
The above is a routine conversation one hears as many times as one passes by a ‘bank street’, an intra/intercity bus-hub, an airport shopping arena or car park or just its foreground. And, nowadays, the ‘dollar or pound or euro’ question is posed to just about anyone who passes by the sellers – you no longer have to look expensively dressed or smell good for the ubiquitous currency dealer to beckon on you ‘to come and buy from me’.
There is yet another observation: this informal currency market is huge. There is practically no amount you can’t buy or sell there.
Accordingly, Daily Query can report with the CBN’s announcement Friday that it would release $20,000 to “eligible bureaux de change (BDCs)” at the rate of N1,580 to a dollar, the apex bank seemed only to be mocking itself, as the amount is believed to be a tokenism that the BDCs could do without.
Investigation revealed that apart from individuals who remit money abroad for the school fees of their wards or for limited goods importation, small scale businesses with financial obligations abroad routinely patronize the informal forex traders.
In a statement issued by Dr Williams Kanaya, the Acting Director, Trade and Exchange Department of the apex bank, the CBN said the announcement was to inform the BDC operators and the general public that “we are providing more liquidity into the market” with a miniscule $20,000 per BDC.
“To this end, the CBN has approved the sale of 20,000 dollars to each eligible BDCs operator at the rate of N1, 580/dollar. This is to meet the demand for invisible transactions.
“All BDCs are allowed to sell to eligible end-users at a margin not more than one per cent above the purchase rate from CBN.
“Eligible BDCs interested in this transaction are directed to make the Naira payment to the CBN deposit account numbers with them,” he said.
He said that payment confirmation and all necessary documentation for disbursement are to be submitted at the appropriate CBN branches in Abuja, Awka, Kano and Lagos for collection of the 20,000.00 dollars.
CBN’s basing the transaction only on the ‘eligible BDCs “interested” in it is instructive.
“It means that even the CBN knows that its forex management or lack thereof is not surefooted enough for its directive to be taken as an order and a direction,” said Cosmos Ugwuagbo an “off-market” currency dealer in the Central Business District, Abuja.
“Truth is that Nigeria’s foreign exchange market is deeper and more complex that the CBN is willing to admit and flow with, for the overall good of the economy. Any central bank jurisdiction that can’t account for its economy’s forex inflows and outflows is off the mark. And this CBN can’t. That is why it is beating its chest that it has given ‘eligible’ BDCs $20,000 each to transact forex business. What I don’t understand is, exactly what is the use?”
Experts say that what the CBN, along with the government of the day, needs to do is to try and engender enough patriotism in Nigerians, at home and abroad, “so their remittances can be more transparently done and you will see that our forex market won’t have any dollar supply issues,” Ugwuagbo said.
