Please forget all the big and confusing grammar. The CBN has officially de-valued the naira. Is this a surprise? I would say no. It has been obvious to everybody that the Government would soon suffer a break-down in her ability to sustain the Naira against the dollar. Government has been spending so much to sustain this; yet, the income into Government coffers keeps decreasing. Jonathan and his cronies’s wiping of the money from the account, the low crude oil price with the advent of the “almighty” Niger delta Avengers have complicated issues to no measure. Government has been struggling all along and without cash the struggles might continue.
To tell you the confused state the Government has been embroiled in, the CBN cannot even announce a figure. According to the CBN it is a floating figure which depends on the current market rates. It means it could be N250 to a dollar, N350 to a dollar, or anything in-between. It could be above N350 too. What the CBN is saying is this: it would be market driven.
This is the complication there-off; the CBN would now operate the Forex through some banks that would act as primary forex markets. This is where I have my doubts. The idea could be noble but with the activities of Nigerian banks’ MDs, I am not the optimistic person in their activities. Many of them look more like money-changing-mafia-cartels capos than real partners in economic development of the Nigeria state. Watch out! Many Banks would likely collude with many institutions to dubiously raise the value of their banks’ assets and muddle up their liabilities so as to qualify as forex agents.
We are in a system that we have seen MDs of banks gone to collect hundreds of millions of dollars in raw currency from political figures for the purpose of money laundering. We have seen how easy many top brasses in banks have aided, to their varying personal advantages, the laundering of cash for our public officials. That Nigeria is in a serious mess cannot be divulged from the activities of these guys. The idea that the CBN would put them in charge, in some critical ways, of forex market should be something many people would ponder.
Nothing stops the particular Bank M.D that has a primary forex licence from setting up a different company(or companies) for the purpose of giving himself an advantage in this forex deals. What is the CBN doing to block the bankers from being the primary beneficiaries of the forex market ? What can the CBN do to make sure that the real people that got the forex are the actual people that need it? This should be the main issue. Any alternative would make the bankers the primary beneficiaries and this could be dangerous.
If the CBN is going to partner with banks in the forex market, it should be clear that conflict of interest shall not be tolerated. The penalty for any infraction(s) should be so severe to deter these bankers. Any attempt to do otherwise would just make more billionaires out these bank executives. We have seen it before and it could happen again.
For now, we would watch as the forex story rolls….Ewolewoo!!