DAILY TRUST
Mahmud Kirikasamma (not real name) is one of the over 100 personnel of the Central Bank of Nigeria (CBN) who were recently disengaged.
In a conversation penultimate week with another disengaged staff, Idris Jimoh (not real name), Mahmud disclosed his plans to convert a considerable part of his savings from naira to dollar.
When Jimoh asked Kirikasamma why he planned to do that, he replied, “Because this cheering rise in the value of the naira is not sustainable.”
Kirikasamma is convinced that the naira will soon drop to N1,600/$.
This conviction by the former CBN employee that the value of the naira will soon begin to depreciate again may not be shared by many Nigerians. However, millions of citizens are quite apprehensive and do not seem to believe that the recent sustained rise in the value of the Nigerian currency may not after all be sustainable for a long period. Those who hold this view cite a number of reasons.
The widely publicised statement about the syndicated $3.3 billion crude oil prepayment facility deal between the Nigerian National Petroleum Company Limited (NNPCL) and the Africa Export Import Bank (Afreximbank), whose objective is to help the federal government of Nigeria in its fiscal and monetary policy reforms aimed at stabilising the exchange rate market, may end up being a fluke.
Part of the reason for this fear is that Nigeria had in the months of February and March, 2024 failed to meet its production quota.
And it is expected to pay for the Afreximbank loan by utilising about 200,000 barrels of crude being extracted. More so, the payment terms are believed to be skewed at a great disadvantage to the country.
Last month, a crypto-currency trading platform, Binance yielded to the pressure from the Nigerian government to discontinue all naira services in the country. This came on the heels of a clampdown on its operations and officials by Nigerian regulators.
The Special Adviser on Information and Strategy to President Bola Tinubu, Bayo Onanuga, had urged the CBN and the Economic and Financial Crimes Commission (EFCC) to take action against platforms that attempted to manipulate the value of the naira using crypto-currency exchange platforms.
Onanuga recommended that crypto-currency channels be outlawed in the country because “this bleeding of our currency will continue unabated,” according to a statement he posted on his X handle.
Two senior executives of Binance, a US citizen, Tigran Gambaryan and British-Kenyan, Nadeem Anjarwalla, were both charged and remanded in custody by the Nigerian authorities before the later escaped from Nigeria to Kenya. He was expected to be repatriated back to Nigeria after he was last week arrested by the Kenyan police.
Still in an effort to strengthen the local currency, the chairman of the EFCC, Ola Olukoyede, said on Tuesday that the commission had frozen 300 illegal forex accounts trading on a peer-to-peer platform.
Olukoyede explained that over $15bn passed through one of the forex platforms in the last one year, outside the financial regulations.
He said the EFCC took the action to ensure the safety of the foreign exchange market and protect the economy.
Also, only recently, media reports revealed that the country’s external reserves were excessively drawn, and there were speculations that the hastily drawn down reserves were utilised to stave off depreciation of the naira. Although the CBN governor, Yemi Cardoso, tried to deny that, many Nigerians do not believe him.
And just as the debate raged about the veracity of the claim by the apex bank governor, the news was broken on April 22, 2024, that the value of the naira fell “to a low of N1,234.49/$” at the NAFEM window, according to data obtained from the FMDQ.
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