Uduegbunam ChukwujamaThere are indications that Nigerian banks will face even tougher times sourcing forex in the coming months, following the latest warning issued by the country‘s banking regulator.
Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele asked banks to expect less of forex supply from the apex bank as the country struggles with scarcity arising from local production and economic issues, low crude oil production, global price shocks and poor sales.
Join our WhatsApp Channelon this score, banks, according to the CBN, should rather look to funding non-oil exports to source foreign exchange.
First Bank, GTBank, Zenith Bank, Access Bank, Stanbic IBTC, Fidelity Bank, and Wema Bank, among others – were recently advised by the apex bank to increase their sources of non-oil exports to generate forex through repatriation.
Nigeria currently struggles with forex scarcity, even as the CBN has consistently initiated and sustained moves to deepen independent sourcing of forex in what appears a negation of its earlier stance on streamlining the foreign exchange market by starving the Bureaux de Change of forex.
Only recently, the apex bank opened the foreign exchange doors to telecommunication companies, including MTN Nigeria, Airtel, and Glo, to start selling foreign currencies.
According to Emefiele, sourcing their own currencies will enable commercial banks to meet foreign exchange demands from account holders.
Emefiele had dismissed insinuations that the apex bank would no longer supply forex to banks. Speaking to the press shortly after the 13th Annual Bankers Committee Retreat, held in Lagos, Emefiele said that the CBN would continue to sell forex to banks.
He cited the progress of the ‘Road to $200 billion non-oil exports revenue programme (RT 200)’, which has so far raised $2 billion, as providing hope of continued forex supply to Nigerian banks.
CBN’s ‘RT 200’ initiative seeks to raise $200 billion in forex earnings from non-oil proceeds in 3 to 5 years.
Prime Business Africa reports that Emefiele had previously threatened to stop providing forex to financial institutions, urging them to stop depending on the apex bank, and source for their international currencies. But Emefiele said the RT 200 initiate is coming to the rescue.
Emefiele’s message of hope amid forex scarcity
“We highlighted the tremendous progress that has been made because we recall that in the course of the year before we started the RT 200, the CBN had actually threatened the banks that they must begin to source their own FX to meet the needs of their customers and not entirely rely on central bank sources,” Emefiele had said.
“But seeing the progress that has been made so far, we’re talking about $62 million plus $622 million plus $850 million, we are talking of almost $2 billion so far. We think that with the good progress and on the basis of the progress that we have made so far, the CBN will continue to support the market with foreign exchange, albeit as hard as it may be.
“We will continue to support the market while the banks themselves continue to ramp up their own sources of non-oil export that can earn FX through repatriation which they can use to fund the needs of their customers.”
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