CBN to Eliminate Forex Black Market

Obinna Chima with agency report

The Central Bank of Nigeria (CBN) is set to eliminate the foreign exchange black market in Africa’s biggest economy, the Minister of Finance, Mrs. Kemi Adeosun, said tuesday.

The naira trades, sometimes 40 per cent below the official rates, against the dollar. Commenting on the wide gap, Adeosun said the CBN has been mandated to scrap the damaging market, reported AFP.

The central bank “has been directed to do this and CBN has promised to do something by putting a system in place to eliminate the black market because it’s damaging the economy”, Adeosun told a conference.

A CBN spokesman, Isaac Okorafor, said the central bank was working towards “ensuring that the forex market operates as effectively as we would envisage”.

He said the aim was to “ensure there is no black market” but did not give details of how this would be achieved.

A top CBN official also confirmed that that the banking system regulator was working on ways to deemphasise the black market, as it had been used over time for speculative attacks on the Nigerian currency.

However, he did not give a precise time when this would happen, but said that no unorthodox means will be used to rid the country of the black market for foreign exchange.
He said: “Serious strategic thinking on how to lay less emphasis on the black market dealers is being fashioned out by the central bank rather than using unorthodox means.”

Nigeria had pegged the naira to the dollar at N197-N199 since March 2015 but the CBN scrapped the 16-month-old peg in June in favour of currency free float. But that has done little to change naira’s fortune.