Currency Speculators Powering the Black Market, Says CBN

By Ugo Aliogo

The acting Director Corporate Communication, Central Bank of Nigeria (CBN), Mr. Isaac Okorafor, has stated that currency speculators and corruption money have been powering the black market and not demand, stressing that this was discovered after an intelligence survey on the market.

Okorafor, who disclosed this over the weekend in Lagos at the 2017 Biennial Convention of the Nigeria Guild Editors (NGE) with theme: ‘A Nation in Recession: Whither the Nigeria Media’ said the intelligence report was corroborated by the activities of people burying monies in grave and their apartments, adding that the question should be if any economist or public policy manager run an economy where a large portion of the cash is locked up somewhere to use it to launch an attack on the currency.

He also noted that the basic impacts of these activities were that they have made the market a monster therefore it can no longer be a good reflection of the correct feelings of the players in the market, stressing that this is the complex situation the CBN has been trying to manage.
The CBN Spokeman further stated that when it was discovered that much of the demand in the black market had been a bubble, CBN decided to hide off some of the items in that market such as tuition fees, noting that as a result they came up with a policy where they have asked Nigerians to visit their banks, “because we were going to fund the banks with foreign exchange for these items.”

He added: “We are in recession because of the nation’s collective failure to diversify the economy; this has put us in a very serious position. We depend on the foreign sources for our income and at the same time depend on foreign sources on the items we spend our incomes on. We depend on the price of oil for much of what we spend and when we spend, we also spend on things that we import, no economy can grow in that manner and no nation has ever developed along that path. As soon as the price of oil began to decline we ran into an economic crisis that gave birth to a recession. We recall that in September 2015, the CBN monetary policy communiqué indicated that the country might sleep into recession in 2016 if nothing is done. It got to a stage where it got to the end of monetary policy.”

He remarked that while monetary policy stabilises the prices, fiscal policy on the other hand is creative policy which powers the economy into production, stating that the impact of the economy crisis was too much on the nation because of structural issues.
Reacting to the CBN’s response to the recession, he said when the apex bank noticed a severe foreign exchange crunch, it ensured that it tap into the sources of foreign exchange such that they would be in flow.

Okorafor said that the second response was to consider how much forex the economy was spending, on what items, how the bank was to allocate to those items, and ensure that some of the items that which are produced and used in the country, the rate of foreign exchange expenditure on them is limited.
Okorafor further explained that the decision gave rise to a list of 41 items which are produced in the country, which the CBN felt that foreign exchange should not be spent on them, in order to direct the scarce forex to setup industries, activities that would stimulate growth and create jobs.

He added that the CBN also tried to introduce the inter-bank foreign exchange market, and also did some intelligence on the black market to find how the black market was getting its power, the CBN can influence that market and divert its activities to the inter-bank market.
In her remarks, the President of the Nigeria Guild of Editors, (NGE) Mrs. Funke Egbemode, called on editors to remain steadfast in their professional pursuit, adding that the nation depends on the media because of the power they wield in the areas of nation building, nurturing little businesses and enterprises to become large corporation and giving a voice to the voiceless.

She explained that the guild has moved from being homeless being whose operational address changed as its president and secretary changed, stating that the outgoing Executives has opened talks with the Nigeria Institute for Policy and Strategic Studies (NIPSS), Kuru for partnership and training opportunities.
Egbemode added: “As professionals whose job impacts every facet of our national life, editors are more than qualified to have Managing Nigeria Intelligently (MNI) at the end of their names. Two of our former president, late Chris Okolie and Baba Halilu Dantiye have blazed the trail in the regards, and it is our desire that editors have slots at the NIPSS.
“The National Open University of Nigeria (NOUN) has shown interest in working with the NGE. We have had meetings with the leadership of the institution and talks are at advanced stage to have a study centre for members and also editors as Examiners of NOUN.”