Former Deputy Governor of the Central Bank of Nigeria (CBN), Obadiah Mailafia, has berated the apex bank for stopping the sale of Foreign Exchange (FX) to Bureau De Change (BDCs) operators.
Naija News had reported that the CBN governor, Godwin Emefiele, announced on Tuesday that the apex bank will no longer sell dollars and other foreign currencies to Bureau De Change (BDCs) operators across the country.
Speaking after a meeting of the monetary policy committee, Emefiele alleged that the BDCs operators have become a conduit for illegal financial flows working with corrupt people to conduct money laundering in Nigeria.
But in an interview with The Punch on Wednesday, Mailafia said that the ban of foreign exchange to Bureau De Change operators may worsen the value of the naira.
The former presidential candidate added that commercial banks in Nigeria cannot be trusted with the sales of forex.
The economist said the banks will prioritise their interests and only make available to the public whatever is left, adding that forex might become scarce as a result of bureaucratic processes in the commercial banks.
He said: “If we are not careful, that decision will actually worsen the naira value because the BDCs, you could walk into any of them anywhere and within five minutes, they will attend to you but the banks, you have to drive to your nearest bank, you have to queue most of the time.
“The CBN has not told us the rate, the banks will want to make a profit over the official rate, we don’t know whether they will make a decent profit or they will profiteer.
“Bankers were the biggest experts in round-tripping. Old habits, I don’t think they change. Leopards are very unlikely to change their spots.
“So, we may end up in a scenario where there is scarcity and the simple economics of demand and supply tells you that where there is increase scarcity, price is likely to shoot up.
“If bank bureaucracy makes it difficult for people to access dollar, what it means is that the bureaucracies, obstacles and bottlenecks are likely to put pressure on supply and pressure on supply may mean an increase in demand for the dollar and greater fall of the naira, if we don’t play the cards well.”
He added: “How can you totally trust these commercial banks because most of them will want to corner the dollar for themselves and whatever is left, then they can now share with the market at a rate they want?” he queried.
“On the naira, it is not just the underlying economic fundamentals that matters like interest rate, inflation and so on, these things matter and the level of debt affect it but there are the non-quantifiable elements like violence, instability, rural banditry and terrorism, those things undermine the productive capacity of the economy.
“They also destroy social capital, the trust that holds the community together to do businesses together.”