The Senate, on Wednesday, resolved to invite the Governor of the Central Bank of Nigeria, Godwin Emefiele, over the free fall of the naira in recent weeks. Mr Emefiele was asked to appear before the Senate in plenary and address the lawmakers behind closed doors. The lawmakers, however, did not fix a date for the governor to appear. On Wednesday, the lawmakers also resolved to embark on a two-month recess that will end on September 20. The resolution to invite the CBN chief was a sequel to the deliberation on a motion by the Ekiti senator, Olubunmi Adetumbi. The motion comes amid the rapid depreciation of the naira.
Easterner reported how the Naira fell significantly against the U.S. dollar at the official market on Tuesday. It opened at N427.30 and closed at N431.00 to a dollar.
At the parallel market, the exchange rate was up to N670 a dollar and as of Wednesday morning, it was pegged at N716 to a dollar although it fell briefly to about N670 to a dollar on Wednesday evening.
Motion
In his presentation, Mr Adetumbi recalled how the CBN earlier placed an indefinite halt on forex sales to Bureau de Change (BDC) operators due to fraudulent acts – a move, he said, triggered the spike of the exchange rate. He expressed concern that the import-export window meant to serve the forex needs of business giants has become a rare opportunity that only a privileged few can access.
“The two instruments of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) could only serve less than 20 per cent of the total forex demand by travellers and businesses,” he said.
“This and many other factors have contributed to the scarcity of forex in Nigeria today.
“As of yesterday, exchange rate was 670 (naira to a dollar). And this afternoon it has gone up to 716,” the lawmaker said.
He called on the CBN to take a new measure to curb the current scarcity and address the sliding exchange.
Penalty for failure
Contributing to the motion, another Ekiti senator, Biodun Olujimi, said there was a need to penalise somebody for failure and the free fall of the naira “and that is the CBN.”
Most of what is happening, she explained, is because people are taking out the dollar, selling and bringing them back in. She wondered why ‘BDCs were shut down and prevented from selling.’ However, Easterner’ checks show that BDCs were not shut down nor prevented from selling. The CBN only stopped selling dollars to them (at subsidised rates) and asked them to source their own dollars independently.
Mrs Olujimi also lamented how airlines are shutting down and the price of Jet-A1 fuel skyrocketing.
“What is happening to the dollar is a replica of what is happening to Nigeria. We are bleeding and bleeding bad.”
Niger senator Sani Musa complained that Nigeria is not exporting but importing and the economic policy has refused to address the issue.
He said the CBN’s policy opens a loophole where the value of the naira cannot be determined. And this can be remedied if the parallel market is allowed to trade.
“Naira will continue to appreciate until we start manufacturing.”
Katsina senator Babba Kaita said the major issue to be tackled is insecurity – upon which many good economic policies would thrive. He feared that no one will come to invest in Nigeria until the issue of insecurity is addressed.
Resolutions
The Senate, thereafter, urged the CBN to urgently intervene to stop the rapid decline in the value of the Naira in relation to the dollar and other international currencies. It also mandated its Committee on Banking, Insurance and other Financial Institutions to conduct an assessment of the CBN Intervention Funds and the decline in the value of the naira to come up with sustainable solutions. Although it is not clear when Mr Emefiele is expected to appear before the Senate, the lawmakers have embarked on an eight weeks break and are expected to resume on September 20. It is also not clear if they will call for an emergency session to meet with the CBN chief.
