CBN’s FOREX Restrictions And Government’s Obsession With Dollars

6 years ago

Nigerians, both home and abroad, have been feeling the bite of the foreign exchange restrictions imposed by the Central Bank of Nigeria (CBN) on since 2015. Bureaus De Change (BDCs) have been made to pass through several new regulations in order to remain in operation, and citizens, both home and abroad, wake up everyday to find out they can’t pay for what they used to anymore. Importers are stuck in limbo, travelers don’t know what to expect on trips, and students in foreign universities have been turned to debtors.

Despite all the pains and confusion caused by these policies, it would interest Nigerians to know that Government and Government officials remain keen on transacting in American Dollars. It may surprise most of you to know that Nigeria’s Budget 2016 is still based on the prices of crude oil in dollars amid all the talks of diversification of the economy, and restriction on FOREX.



The N3.6 billion dollars budgeted for BMW cars will not be paid in Nigeria to Bavaria Motor Works, but in dollars. This is at a time when Innoson Motors and Stallion Motors which are both producing cars in Nigeria will shout “Hallelluyah” at the Naira equivalent, which will create more jobs, and deepen automotive technology advancement in Nigeria.





It will appear that the Nigerian Government prefer spending dollars to Naira, but it also prefers to receive payments in dollars over its own legal tender. Recently, Africa’s largest telecommunications company, MTN was slapped with a $5.2 billion fine for not disconnection about 5.2 million phone lines. The first day Nigerians first heard this fine, we believed it to be a N5 billion but according to the regulatory body, Nigerian Communications Commission, the penalty was calculated at $1,000 per defaulting MTN line! How so?! Why dollars? As much as some of us have tried to create some logic by explaining the possibility of a typographical error which may have exchanged “N” for “$”, the regulatory body insists and maintains that its fine is in USD.



So what exactly inspires this preference of foreign currency over the Nigerian legal tender? In the case of the MTN fine, it is so ridiculous that the NCC has reduced the fine to $3.9 billion, but let’s face things square, no company is will be the scapegoat to foot 15% of your national budget. It has never happened in the history of humanity, and it will never happen! Even though the NCC has slightly reduced that fine in a “show of mercy”, but we should admit our mistakes when them.






We must have a clear economic direction in this country. We’re either restricting FOREX from the entire system or we are not. We’re either growing our economy or we’re not. We’re either encouraging foreign direct investment, or we’re killing off the existing foreign investors who have dared to succeed within all the peculiarities of Nigeria.

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