Early last week, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, announced after the Monetary Policy Committee (MPC) concluded its meeting that the bank has banned the sale of foreign exchange to Bureaux de Change due to nefarious activities and the gradual dollarisation of the economy. This news shocked business people and ordinary citizens alike. There were speculations that the ban would cause the naira to depreciate further. On Wednesday, the first day after the ban was imposed, the naira fell to N525 per dollar in the parallel market from N504 per dollar.
This drop contrasted with the appreciation of the naira at the NAFEX Investors and Exporters (I&E) window by N0.17. A highly placed source at the Association of Bureaux de Change Operators of Nigeria (ABCON) told this newspaper that the decision was far reaching and would definitely have adverse effects on members of the association. When asked if ABCON was going to fight against the CBN decision, he noted that the association acknowledged the fact that the CBN represented the government and to protest the decision was to protest against the government, saying the association was likely to use peaceful tactics to get the ban reversed. He also said that the decision was likely to be reviewed when the MPC holds another meeting and that the latitude hitherto given to the parallel market would not be as lax as before. According to him, there is sure to be ‘sizable reforms’. The remaining option for most Nigerians to get forex is to go to the Deposit Money Banks (DMBs).
New National Star’s correspondent visited some banks within Abuja to confirm how easy it will be to get forex now that the option of BDC operators is almost off the table. At a Zenith Bank branch in Abuja, our reporter was told that forex would only be made available to a customer who was about to travel abroad to make purchases preferably with a return flight ticket from as early as a month; while at a First City Monument branch she was told that a request could be placed a week earlier to departure time. Both banks requested a return flight ticket, an international passport, a visa and other documents that would be useful for the business trip. With the Zenith bank branch saying a customer needed to give a one month notice to get dollars, it definitely suggests that the banks are still not ready to meet the avalanche of dollar demand that may come their way. Last Friday, the NAFEX window closed at the rate of N411.44 per dollar and the parallel market, according to abokiFX, closed at N515 per dollar. The CBN has not given a hint about when it may likely lift the ban but this type of ban happened in 2016 when it discontinued the sale of forex to BDC dealers.