…As Senate Summons CBN Governor
By Hillary Asemota
A pro-development group, Esan Agenda, has called on the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, Minister of Finance, Zainab Ahmed and the Presidency to apologise to the Edo State Governor, Mr. Godwin Obaseki, for disparaging him when he revealed that the apex bank was printing money indiscriminately to shore up government’s dwindling revenue.
Convener of the group, Mr. Akhere Obozele, in a statement, said the call became necessary in the light of the drop in foreign exchange of the Naira to the Dollar, which now stands at N710/$1 as at July 27, 2022; the depletion of the country’s Excess Crude Account (ECA), and the worrisome debt servicing situation.
Obaseki had in April 2021 raised the alarm that the CBN printed N60bn to share to states and local governments in the wake of shortfall in government revenues occasioned by the drop in oil prices and failure of the government’s economic fiscal policies.
According to him, “It is now clear to the world that Edo State Governor, Mr. Godwin Obaseki was right after all when, in 2021, he raised the alarm about the arbitrary and unsustainable resort to printing money and sharing to states when the government ought to have taken drastic and foundational measures to fix the countries fiscal woes.
“With the unchecked drop in the value of the naira, Governor Obaseki is vindicated. The governor said the Minister of Finance and the CBN governor were playing the ostrich when they ought to buckle up and fix Nigeria’s disarticulate economy.”
The group noted that it was necessary to remind Nigerians that the governor predicted that $1 will exchange for N1000 if those manning the economy didn’t get their acts right, a reality that is now staring Nigerians in the face.
“The governor is an economist, who understands economic fundamentals. That Governor Obaseki raised the alarm then was because he was a patriot and knew that drastic measures had to be taken. Instead of taking his advice, elements within the Federal Government launched attacks against him and embarked on media rounds to disparage the governor’s patriotic comments.”
Meanwhile, the Senate has resolved that the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, be summoned to clarify the cause reasons for the free fall and rapid depreciation of the value of the naira.
The Senate Committee on Banking, Insurance and Other Financial Institutions was mandated to assess the impact of CBN intervention funds meant to support critical sectors of the economy.
The resolutions were reached by lawmakers after the upper chamber considered a motion sponsored by Senator Olubunmi Adetunmbi (APC – Ekiti North).
The motion was entitled, “State of CBN Intervention Funds and Free Fall Of Naira.”
Coming under Order 41 and 51 of the Senate Standing Order, as amended, Adetunmbi bemoaned Nigeria’s economic reality amid an urgent call for “extraordinary measures”.
He noted that the CBN through its numerous multi-sectoral intervention funds, provided special funds to support critical sectors of the economy.
He explained that in view of such interventions, it had become necessary to assess the state of implementation and effectiveness of the funds deployed for the purpose.
The lawmaker, recalled that the CBN in 2021, placed an indefinite halt on forex bidding by Bureau de Change operators (BDCS) and importers over allegations of abuse and mismanagement.
He observed that the halt by the CBN resulted in a spike of the exchange rate.
According to Adetunmbi, “the two instruments of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) could only serve less than 20% of the total forex demand by travelers and businesses.”
He expressed worry that the import and export window meant to serve the forex needs of business giants, “has become a rare opportunity that only a privileged few can access.”
“These and a number of others have contributed to the excessive scarcity of forex in Nigeria today”, he added.
He noted that as at the 26th of July 2022 (yesterday), the exchange rate in the autonomous segment (BDCS) of the foreign exchange market is N670 to 1 United States Dollar and projected to end at N1000 by end of the year based on the current rate of depreciation.
He, therefore, advised the Central Bank to take new measures to curb forex scarcity and address the sliding rate of Naira exchange.
In his contribution, Senator Sani Musa (APC – Niger East), faulted the Central Bank’s decision to halt foreign exchange biddings, thereby cutting off the parallel market – Bureau de change operators.
According to him, the attempt by the CBN to control the value of the naira with the continuous exclusion of BDCs would only lead to its further depreciation.
He, therefore, advised the apex bank to rather ensure the regulation and monitoring of the parallel market.
“What CBN used to do was to give out $10,000 (USD) to each of these BDCs with a clear directive for it not to be sold above N470 as against the $419 exchange rate. It worked.
“But today, nobody is determining where the rate is going and I can assure you we can’t have that solution because we are only importing”, he said.
On his part, Senator representing Katsina North District, Senator Ahmad Babba-Kaita, said one way to improve the value of the naira was to encourage foreign investments to attract inflow of other currencies into Nigeria.
“The only way we can access the dollar will be determined by other economies and not ours”, he noted.
He, however, attributed the lack of foreign investments into Nigeria on the poor security situation caused by banditry, terrorism and other criminal activities.
The Senate, in its resolutions, called on the CBN to urgently intervene to stop the rapid decline in the value of the Naira vis-à-vis the Dollar and other international currencies.
It also mandated the Senate Committee on Banking, Insurance and Other Financial Institutions to conduct an assessment of CBN intervention funds and the declining value of Naira to come up with sustainable solutions
