Tunde Lemo, a former deputy governor (Operations) of the Central Bank of Nigeria has said that the threat from the Economic and Financial Crimes Commission (EFCC) to arrest Bureau de Change operators who hoard dollars and other foreign currencies will worsen the dire economic situation of the country.
Abdulrasheed Bawa, EFCC Chairman had said that intelligence report linked persons and organisations to the hoarding of foreign currencies, especially US dollars in key commercial cities of Kano, Lagos, Port Harcourt, Enugu and Calabar and warned the hoarders to desist or risk arrest, as a major offensive against the speculators was underway.
Lemo, who responded to the threat issued by Abdulrasheed Bawa, EFCC Chairman in Abuja during his meeting with Bureau de Change operators on Friday, said that the Central Bank of Nigeria (CBN) rather than EFCC, can address the situation better by allowing a market-determined exchange policy with less capital control in order to attract liquidity from independent sources.
Speaking to BusinessDay in Abeokuta, the Ogun state capital on Saturday, Lemo noted that scarcity of foreign currencies in the country was caused by insecurity and non remittance of forex by NNPC (now NNPC Limited) which is a major supplier, saying the situation could get worsened if EFCC goes ahead to arrest the speculators.
“This (the arrest) will lead us to nowhere and worsen the dire situation. The current scarcity is caused by the security situation in the country as well as the non remittance of forex by NNPC, a major supplier.
“The market is sensitive to too many rules. CBN should move more to the market- determined exchange rate policy with less capital control. This is the only way to attract liquidity from independent sources. Involving EFCC, at this stage will compound the problems”, he said.
When asked about the control mechanism that could be used against speculators to salvage Naira value against dollar, Lemo said, “any BDC hoarding forex is doing it at a great cost because he will be tying down a lot of funds. He is doing it in expectation of a significant ‘stock-holding’ gain because he is sure the rate will definitely go up.”
Lemo, who is also the Board Chairman of Titan Trust Bank, asked the Central Bank of Nigeria to come out with robust monetary interventions to urgently address falling Naira against Dollar and other foreign currencies, thereby, saving the country’s economy and making available the foreign currencies to Nigerians at cheaper rates.
“A smarter thing to do is to inflict severe losses on these speculators by CBN intervening during this period by selling more forex. This will teach the speculators a lot of lessons”, he added.