The Central Bank of Nigeria (CBN) has been busy in the past few months, releasing and reversing monetary policies, all in a bid to save the country’s dwindling economy and its ailing naira.
After agreeing to devalue the naira, in what it termed, “freeing the naira“, the apex bank increased interest rates to 14%, saying it wants to encourage savings and investments. Recall also, that it recently ordered commercial banks to accept cheques into savings accounts.
Now, the naira is speeding towards N400 to a dollar and already at N500 to a pound.
The effect of the latest increase in interest rate is yet to be seen, even though some manufacturers in the country have condemned the policy, wondering why a country willing to encourage local production would make bank loans expensive. Already, banks have effected interest rate hike on existing loans.
Besides, who has the money to save when there is inflation and at the same time, very little money in circulation, barage of unpaid salaries and mass retrenchment of workers, Nigerians have asked.
While that is yet to be sorted out, the CBN has issued a new directive on international money transfer.
It has blocked many services used by Nigerians to send and receive money abroad. On Tuesday, it warned Nigerians to beware of unlicensed International Money Transfer Operators.
Nigerians, at home and in diaspora, are now limited to only three money transfer operators – Money Gram, Western Union and Ria
“This move is arbitrary, inexplicable and hugely detrimental to the Nigerian diaspora who rely on hundreds of money transfer companies and banks, providing them with choice, convenience and competitive pricing.
“Even now, as we suspend our service, there is no clarity on why this sudden change has happened. If it is on the basis of new rules, there was no warning. If it is a re-interpretation of old rules, local correspondent networks and banks should have been forewarned.
“This reverses the progress made by the country when the Nigeria Central Bank banned Western Union’s exclusivity agreements that had created a near-monopolistic position in the international money transfer market. Western Union controlled 78% of the market share when CBN outlawed exclusivity agreements with local banks.”
Renowned comedian, Bright Okpocha (a.k.a Basketmouth) could not find a comic side to the new policy.
He wrote on his Instagram page:
CBN agrees exclusive deal with Western Union, Money Gram and Ria Money Transfer to stop all Nigerian money transfer businesses and ensuring all worldwide transfers go through only these 3 American companies in and out of Nigeria.
This senseless money transfer deal to Nigeria is what has caused the recent spike in FX rates. I hear FX will be £1 to N700 and $1 to N550 in the next couple of days
I wonder which planet CBN is on, when you give a whole country’s source for foreign currency to just 3 foreign companies and think it is sensible.