By Odunewu Olusegun
Financial experts have expressed fears over the Naira 4 Dollar Scheme recently introduced by the Central Bank of Nigeria, noting that the benefits at the black market still far outweighs what the value is at the official.
National Daily investigation shows that the official value of the Naira as at Monday, is N411 to a dollar, while it is N480 at the black market.
According to the analysts, with the addition of the N5 incentive, it would only swell the official value of the Naira to N416 per dollar, leaving a differential of N64 per dollar, a much better lure for foreign currency receivers back home in Nigeria.
It would be recalled that on March 5, the Central Bank of Nigeria (CBN) took to its website to announce the introduction of the CBN’s “Naira 4 Dollar Scheme” for Diaspora Remittances — a N5 for every 1 dollar incentive to encourage Nigerians living abroad to send money through legal channels.
The promo which would run for 3 months, beginning from Monday 8 March 2021 and ending on Saturday 08 May 2021, is expected to reduce inflow of dollars into the black market where rates are higher.
According to Kalu Aja, a financial planner, the apex bank should instead devalue the Naira to match with the black market price of the Naira.
“If you want access to the diaspora funds, then devalue your currency to match the “street”. The laws of men cannot usurp the laws of economics. The CBN exchange is artificial. If you can receive cash in $ (dollar) and sell to who I prefer, why is there an official rate?”
Audu Hassan, a parallel market operator, said if the black market rate is higher than that of the CBN, why would anyone send their dollar via the official channel.
“Paying N5 will not move those transactions to banks. 44 items are still banned from CBN fx auction, CBN told them to “go source their forex” They have. Why N5?” he added.
Another critic of the CBN initiative, Aloy Chife, Managing Partner or Saana Capital, said as long as the gap remains between the official rate and black market, the incentive will not result in a projected outcome.
“Float the Naira. Let’s swallow the bitter pill in one gulp.” Chife suggested in a comment he made in reaction to the CBN naira for dollar incentive.
Meanwhile, investigation revealed that Nigeria is not the first to introduce incentives for its citizens living outside the country, Bangladesh and Pakistan both took the same decision in 2019 and 2020 respectively.
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