The Central Bank of Nigeria has defended the Arabic inscriptions on Nigeria’s currencies against a lawsuit seeking its removal
The apex bank argued that the Ajami (Arabic) inscription is not a symbol of Islam or its mark but an inscription to aid non-English speakers who are literate in the use of Ajami for trade.
However, Chief Malcom Omirhobo, the lawyer that dragged the apex bank to court, argued that an Arabic inscription on the nation’s currency has naturally portrayed and branded Nigeria as an Islamic nation, against its constitutional status of a secular state.
Omirhobo further stated that the action of the apex bank violates section 10 and 55 of Nigeria’s constitution.
Section 10 reads: “The government of the Federation or of a state shall not adopt any religion as state religion.”
Therefore, Omirhobo prayed that the court compelled the central bank from “further approving, printing and issuing naira notes with Arabic inscriptions, bearing in mind that Nigeria is a secular state.”
The Lagos based lawyer also prayed that the court mandates the central bank to replace the Ajami inscriptions with either English language or any of the nation’s three official languages, Yoruba, Hausa or Igbo.
Abiola Lawal, counsel to the apex bank, in a counter-affidavit, argued that “the Ajami inscriptions on some of the country’s currencies do not connote any religious statements or Arabian alignment.”
Lawal insisted that the Ajami inscriptions were not a threat to Nigeria’s unity or secular status.
He said: “The inscriptions on the country’s currencies do not and at no time have they threatened the secular statehood of the nation or have they violated the Constitution of Nigeria, as every design and inscription was finalised with the approval of the relevant government bodies.”
Lawal stated that “Ajami inscriptions” on the naira notes dates back to the colonial era “and they do not imply that Arabic is an official language in Nigeria.”
Quoting CBN, he said, “The naira notes retained the inscriptions with Ajami since 1973 when the name of the Nigerian currency was changed to naira from pounds.
“The Ajami was inscribed on the country’s currency by the colonialists to aid those without Western education in certain parts of the country, who, back then, constituted a larger part of the populace.
“The Ajami is not a symbol or mark of Islam but an inscription to aid the populace uneducated in Western education in ease of trade.”
Finally, Lawal said the removal of Arabic inscriptions “would cost the tax-paying Nigerians and the Federal Government colossal sum of money to discard the existing naira notes and print new ones in satisfaction of the plaintiff.”
Naira Plunges to Record Low of N422/US$1 at Official Market
The Nigerian Naira extended its decline to N422 to a United States Dollar at the official forex market, the investors and exporters forex window managed by the FMDQ Group.
Naira opened the day at N413.50 to a US Dollar before plunging to as low as N436 at the spot forex market and N446 at the forward market. The local currency eventually closed the day at N422.07 per US Dollar.
Investors at the window traded $141.94 million during the trading hours of Thursday.
The decline was after Vice President Osinbajo asked the Central Bank of Nigeria (CBN) to rethink its current forex policy and allow the Naira to reflect market conditions. This, the Vice President said will help close the current gap that exists between the official rate and black market rate.
Media outlets had interpreted the Vice President position as a call for further devaluation of the Nigerian Naira. However, in a statement signed by Laolu Akande, Senior Special Assistant to the President on Media & Publicity, Office of the Vice President, Akande explained that Osinbajo is simply calling for a single forex rate to dislodge the activities of speculators and hoarders at the various unregulated black market.
He added that the 40 percent or N160 arbitrage difference between the official rate of N410 and N570 offered at the black market will continue to encourage corruption in the forex market.
“For context, the Vice President’s point was that currently the Naira exchange rate benefits only those who are able to obtain the dollar at N410, some of who simply turn round and sell to the parallel market at N570. It is stopping this huge arbitrage of over N160 per dollar that the Vice President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40% profit!
“This was why the Vice President called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.”
At the black market, traders exchanged Naira at N565 to a United States Dollar on Thursday.
Osinbajo Explains Why Forex Policy Should Discourage Arbitrage and Corruption
Following Vice President Yemi Osinbajo suggestions that the Central Bank of Nigeria (CBN) should rethink its present forex policy that encourages arbitrage and corruption and allow the Nigerian Naira to reflect market realities that were misconstrued as devaluation by the media, the Vice President has now come out to clear the air that he is not calling for a devaluation of the embattled Naira but to close the arbitrage gap of 40 percent gain that existed between CBN rate of N410/US$1 and the black market rate of N570.
In a statement released by Laolu Akande, Senior Special Assistant to the President on Media & Publicity, Office of the Vice President, the Vice President position was that the current Naira exchange rate benefits only those who are able to access the US Dollar at N410, “some of who simply turn round and sell to the parallel market at N570. It is stopping this huge arbitrage of over N160 per dollar that the Vice President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40% profit!,” the statement reads.
It continues “This was why the Vice President called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.
“It is a well known fact that foreign investors and exporters have been complaining that they could not bring foreign exchange in at N410 and then have to purchase foreign exchange in the parallel market at N570 to meet their various needs on account of unavailability of foreign exchange. Only a more market reflective exchange rate would ameliorate this. With an increase in the supply of dollars the rates will drop and the value of the Naira will improve.
“The real issue confronting the economy on this matter is how to improve the supply of foreign exchange, but this will not happen if we do not allow mechanisms like the Importers and Exporters window to work. If we allow this market mechanism to work as intended, we will find that the Naira will appreciate against the dollar as we restore confidence in the system.”
Dollar Rate to Naira Today at Official Forex Window
The Dollar rate to Naira closed 0.10 percent lower on Wednesday at the official forex window despite supply rising by over 100 percent.
Naira dipped at the official forex exchange window to N414.73 against the United States Dollar on Wednesday, down from N414.30 it closed on Tuesday.
The Dollar rate to Naira opened the day at N414.33 before dropping to as low as N415.20 during the trading hours of Wednesday. Investors traded $266.32 million on Wednesday, against $122.15 million exchanged on Tuesday.
At the unregulated forex section, the black market, the Naira was exchanged at N565.00 and N568.00 to a US$ on Wednesday in Abuja.
In Uyo, forex dealers said the Naira exchanged at N580 to a U.S dollar N580.00 due to increase in demand they experienced on Wednesday.
“We bought at N570.00 and sold at N572.00 per $1 on Tuesday, but today, we sold at N578.00 and even N580.00 at some point because the demand was much and people were selling as they see deemed fit, ” the anonymous dealer stated.
However, the Central Bank of Nigeria’s exchange rates remained largely unchanged as shown below.
Central Bank of Nigeria’s Exchange Rates
|10/6/2021||SOUTH AFRICAN RAND||27.0668||27.0998||27.1328|
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