CBN To Eliminate Forex Black Market – Adeosun

Naira notes

Abuja (New Telegraph) — The Central Bank of Nigeria (CBN) will try to eliminate the gap in exchange rate against the dollar between the official and black markets, the Minister of Finance, Mrs. Kemi Adeosun, said yesterday. Speaking during an economic conference in Abuja, the Minister said that the: “CBN has been directed to do this and has promised to do something by putting a system in place to eliminate the black market because it was damaging the economy.” . . .

CBN’s Acting Director, Corporate Communications, Mr. Isaac Okorafor, said the Apex 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. The naira has traded around N305.5 to the dollar on the official interbank market since August, while it was quoted at N487 to the dollar on the parallel market on Monday.

The naira is trading on the parallel market some 40 per cent lower than the official rate as low global crude prices have dried up vital oil revenues and pushed Africa’s largest economy into recession.

The CBN scrapped a 16-month-old peg of N197 to the dollar in June, but it continues to trade in the official market, so that the naira remains far stronger against the dollar there, than on the parallel market. The government has blamed the black market for damaging the already shaky economy.

Operatives of the Department of State Security (DSS) recently arrested some parallel market operators in Lagos and Abuja. Also raided by the DSS operatives were registered bureaux de change (BDCs) operators, who were accused of selling the dollar above N400.

The development forced some of the BDC operators to seek means of selling foreign currencies in their possession, especially dollars, pounds and euros at stipulated rates.

According to forex dealers, the DSS operatives posed as end-users who came to purchase dollars from the BDCs. After surveying the market for exchange rate offerings, they arrested some BDC operators who sold above the CBN’s stipulated rates. Meanwhile, it emerged yesterday that Nigerians living abroad remitted over $35 billion to the country in 2016.

The Senior Special Assistant to the President on Foreign Affairs and Diaspora matters Mrs. Abike Dabiri-Erewa, confirmed this in Abuja when she paid a courtesy visit to the executive members of the Federal Inland Revenue Services (FIRS). Erewa said that the amount was the highest remittance in Africa and third largest in the world by those living abroad. “In 2016, they remitted $35 billion, which is higher than what was remitted in 2015.

This is the highest in Africa and the third largest in the world remittance by people living abroad”, she said. She informed the FIRS boss of concerns raised by Nigerians in the Diaspora in respect to taxes and other investment incentives.

“There is a lot of talk about your organisation from the Diaspora concerning taxes; whether there will be tax incentives for Nigerians coming back home to engage in agriculture and other businesses; what are the plans and projects for them? Recently, they expressed concern over reports that we need to pay tax on our passports.”

She added that, both the FIRS and her office need to communicate with Nigerians in the Diaspora, stressing that “there should be collaboration between both offices to disseminate information in case they have questions or want answers.”

In his response, Executive Chairman of the FIRS, Mr. Babatunde Fowler, said what Nigerians need for immigration services is evidence of tax payment. “There is no direct tax on passports. It’s just to show evidence of paying tax and, of course, you’re entitled to all the services of government,” Fowler said.

© 2016 Madjack Business Report

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CBN To Eliminate Forex Black Market – Adeosun