There is growing frustration among customers who have tried to withdraw the dollars sent to them via money transfers, but could not due to the scarcity of foreign exchange (FX) in the Nigerian banks.
Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), said the official FX receipt from crude oil sales into the country’s official reserves had dried up steadily from above $3 billion monthly in 2014 to an absolute zero dollar as at end November 2022.
One of the frustrated customers who spoke with BusinessDay, said: “Today, after a week and several attempts at three GTBank branches in Surulere, I have been unable to withdraw $200 transferred by a friend in the US via WesternUnion.”
The customer said after waiting for almost 30 minutes on the queue at GTBank on Wednesday, he was told WesternUnion service was unavailable. “The first branch I went to asked me to go there because their network was down.”
“I only found out because a gentleman walked in to find out if he could withdraw dollars. He’s been trying since Friday to withdraw money to pay his children’s school fees. He says he has been to two other banks – UBA and Access – where he’s either told, transactions not found or the network is down,” the customer said.
Another customer who needed to access her dollars to pay school fees could not get it from her bank but was able to transact with a Bureau De Change operator.
“I have been having trouble withdrawing $2,200 from my FirstBank domiciliary account because the branches I had visited said there was no currency,” the customer said in a letter to the bank seen by BusinessDay. “I would appreciate it if my request for cash could be granted because I need the money to pay my school fees before the deadline on December 30.”
A banker who shared a similar experience said, “Do you know how many people who have lost admission abroad? A lot of people have lost admission. Somebody in double 300 level wanted to pay his school fees there for three months, the money could not get to the school. Some people are losing their accommodation; one even wanted to commit suicide. We do not have the FX; it is not available. I work in a bank; the time I travelled, I got my PTA from Citibank.”
This is in spite of the CBN’s incentive scheme of paying N5 for every one dollar received by all recipients of diaspora remittances through its licensed International Money Transfer Operators, introduced last year to boost inflows of diaspora remittances into the country.
Commenting, a Lagos-based investment analyst, said: “This still relates to the rationing of dollars by the CBN. The banks are not getting enough dollars from the CBN.”
Responding to the development, Toyin Sanni, group chief executive of Emerging Africa Capital Limited, said: “As our crude production reduces and as we spend more in terms of subsidy financing, obviously our dollar reserves are under pressure. In terms of the volume the banks are able to access from the central bank, I cannot tell now. It is really much of a supply challenge.”
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Emefiele said in November that the number of student visa issued to Nigerians by the UK alone had increased from an annual average of about 8,000 visas as of 2020 to nearly 66,000 in 2022, implying an eight-fold surge to about $2.5 billion annually in study-related FX outflow to the UK alone.
He said it was against the backdrop of the worsening mismatch between FX market demand and supply, and the need to boost FX earnings that the CBN and the Bankers’ Committee initiated the RT200 programme in February 2022.
In February 2022, the CBN introduced the ‘Race to $200 billion in FX Repatriation (RT200)’ programme, with the goal of repatriating $200 billion of non-oil export earnings over the next 3–5 years. Through the programme, the CBN intends to reduce the country’s exposure to volatile sources of FX (mainly oil exports) and the main component of the program is a rebate scheme to encourage repatriation and sale of export proceeds into the FX market.
Nigeria’s external reserves, which stood at $37.12 billion as of January 24, 2023, is projected to decline to $34.9 billion at the end of 2023, according to the Nigerian Economic Summit Group.
