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Foreigners, BDCs abuse forex deals, says CBN

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In from Ali Smart …

The Central Bank of Nigeria (CBN) has said that businessmen from Ghana and other African countries are invading the Nigerian foreign exchange market, and in connivance with Bureau De Change operators get easy access to foreign exchange to the detriment of the economy.

The apex bank lamented, that “Ghanaian businessmen come to Nigeria to source for forex because they believe it is easy to get forex in Nigeria. As much as $1 million dollars can be demanded by these foreign businessmen from BDCs” he revealed.

This was revealed at the 20th Seminar for Finance Correspondents and Business Editors on the impact of crude oil prices on external reserves and exchange rate management in Nigeria on Wedenesday in Calabar, Cross River state by the Director Monetary Policy of the CBN, Mr. Moses Tule.

According to him, nationals from other African countries even as far as Central African Republic come to Nigerian Bureaux de Change for forex which was partially responsible for high demand for hard currencies at the nation’s foreign exchange market.

He cautioned that the “private sector must not be predatory in their activities and should be patriotic for the economy to grow.”

Tule noted that Nigeria is the only country in the world that funds BDCs and advised that since “achieving its objectives the CBN should have withdrawn from funding the BDCs” and left them to source for their forex as other countries around the world do.

Tule cautioned that “if we do not control our consumption pattern, we will not have a Naira, because you cannot plan on the volatility of the price of crude oil alone. We need change our structure of production to avoid a further forex crisis, and we need to be very careful how we share money from Excess Crude Account (ECA).”

Read also: CBN issues warning to BDCs on BVN

The CBN director also expressed concern that as the country approaches the end of 2015, there has not been any implementation of capital projects across the country noting that “when a government does not execute capital projects there is no future for the country. Execution of capital projects like hospitals, roads and bridges help to reflate the economy with the jobs they create and the opportunities they provide.”

Tule also disclosed for the first time that the CBN contributed N2 billion for the rebasing of the economy last year.

This amount, he said, is different from what the federal government and other agencies contributed to the exercise. In spite of these contributions, Tule noted that Nigeria’s economy is living on the illusion of being strong as some sectors considered informal were not captured in the rebasing exercise yet the country brags of being the largest economy in Africa.

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