Senate Summons CBN Governor, Emefiele Over Naira Free Fall

The Senate, on Wednesday, resolved to summon the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, to educate and inform senators in a closed session on the reasons for the rapid depreciation of the value of the naira against foreign currencies.

The upper chamber also mandated the Senate Committee on Banking, Insurance and Other Financial Institutions to assess the impact of CBN intervention funds meant to support critical sectors of the economy.

The resolutions were reached by lawmakers after the Senate considered a motion entitled, “State of CBN Intervention Funds and Free Fall Of Naira” coming under Order 41 and 51 of the Senate Standing Order, as amended sponsored by Senator Olubunmi Adetunmbi (APC – Ekiti North).

Adetunmbi lamented Nigeria’s economic reality amid an urgent call for “extraordinary measures.”

The law maker disclosed that the CBN through its numerous multi-sectoral intervention funds provided special funds to support critical sectors of the economy.

He opined that in view of such interventions, it had become necessary to assess the state of implementation and effectiveness of the funds deployed for the purpose.

The lawmaker recounted that the CBN in 2021, placed an indefinite halt on forex bidding by Bureau de Change operators (BDCS) and importers over allegations of abuse and mismanagement, stressing that the halt by the CBN resulted in a spike in the exchange rate.

Adetunmbi said “the two instruments of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) could only serve less than 20 per cent of the total forex demand by travellers and businesses.”

He bemoaned that the import and export window meant to serve the forex needs of business giants, “has become a rare opportunity that only a privileged few can access”, adding that these and a number of others have contributed to the excessive scarcity of forex in Nigeria today.

He stated further that as of July 26, 2022, the exchange rate in the autonomous segment (BDCS) of the foreign exchange market is N670 to 1 United States Dollar and likely to end at N1000 by end of the year based on the current rate of depreciation.

Adetunmbi urged the Central Bank to take new measures to curb forex scarcity and address the sliding rate of Naira exchange.

Senator Sani Musa (APC – Niger East) in his contribution, faulted the Central Bank’s decision to halt foreign exchange biddings, thereby cutting off the parallel market – Bureau de change operators.

Musa explained that the attempt by the CBN to control the value of the naira with the continuous exclusion of BDCs would only lead to its further depreciation and advised the CBN to rather ensure the regulation and monitoring of the parallel market.

According to the law maker “What CBN used to do was to give out $10,000 (USD) to each of these BDCs with a clear directive for it not to be sold above N470 as against the $419 exchange rate. It worked.

“But today, nobody is determining where the rate is going and I can assure you we can’t have that solution because we are only importing.”

On his part, Senator Ahmad Babba-Kaita, representing Katsina North District, said one way to improve the value of the naira was to encourage foreign investments to attract inflow of other currencies into Nigeria.

Babba-Kaita also attributed the lack of foreign investments in Nigeria on the poor security situation caused by banditry, terrorism and other criminal activities.

However, the Senate, in its resolutions, called on the CBN to urgently intervene to stop the rapid decline in the value of the Naira vis-à-vis the Dollar and other international currencies.

The upper chamber  also mandated the Senate Committee on Banking, Insurance and Other Financial Institutions to conduct an assessment of CBN intervention funds and the declining value of the Naira.