The Nigerian economy is facing growing uncertainty as the Central Bank of Nigeria (CBN) has yet to fulfill its promise of clearing over $10 billion in foreign exchange debts owed to Deposit Money Banks (DMBs).
This delay has placed immense pressure on the country’s currency, leading to a challenging situation for both financial institutions and the general public.
Over two weeks ago, the immediate past acting CBN Governor, Folashodun Shonubi, had announced that negotiations on these dollar debts with commercial banks had been concluded and all forex exchange backlogs would be cleared within one to two weeks.
However, multiple top bank executives have revealed that the promise remains unfulfilled, leaving banks in a tight FX liquidity position.
This liquidity crunch has compelled many lenders to temporarily suspend various FX transactions, including school fees and Personal Travel Allowance applications. The situation has also worsened the dollar scarcity at the parallel market, prompting bank customers to turn to the black market to meet their forex needs.
The delay in clearing these forex debts has further eroded confidence in the naira, resulting in a decline in its value to between 990/$ and 995/$ in major cities like Lagos, Abuja, and Kano.
Economic experts warn that if the situation persists, it could lead to higher costs of goods and services, causing more businesses to shut down.
Manufacturers, who heavily rely on imported raw materials, fear that the rising costs will lead to unaffordable products and a preference for cheaper imported alternatives.
The appointment of a new CBN Governor, Dr. Olayemi Cardoso, comes at a critical time, with the central bank facing significant challenges related to the forex market and currency stability.
As the nation grapples with these economic pressures, it remains to be seen how the new leadership will address these issues and restore confidence in the financial markets.