The ongoing decline in the value of the Naira against the dollar was blamed on current unofficial remittances from the diaspora according to the Central Bank of Nigeria (CBN), on Thursday.
The naira plunged to a record low of N925/$1 on the black market on Wednesday as demand for foreign currency outstripped supply. Folashodun Shonubi, acting governor of the CBN, said this while delivering a Distinguished Personality lecture titled: “Diaspora Remittances and Nigeria Economic Development” for students of the Executive Intelligence Management Course (EIMC) 16.
This is the result of the foreign exchange regime being liberalised, which marks a significant divergence from the results attained under the leadership of President Muhammadu Buhari.
Shonubi noted that a lot of diaspora remittances arrived in Nigeria in dollars and were not officially documented; as a result, they ended up in black or parallel markets.
“With those remittances, the dollars have come in, we know the dollars have come in but we don’t see them in the official system. So, they must be going somewhere and somewhere.”
“And the challenge with the black market, unofficial market or parallel market or whatever name you want to call it, it is as a result that it is not regulated, and it becomes an easy place to have criminal activities.
“We investigate bankers, not just bankers, anybody who has committed an offence, the first thing they want to do is to run to the black markets, change it to the dollars because it is less money to carry around.
“Some of the funding in the black markets are actually from diaspora remittances. That’s why it is important we need to know a lot of what’s going on there. We can’t play the sentiment game. If we don’t understand the dynamics, we usually go with the literature which does not necessarily work for us,” the top banker said.
He stated that “we have countries that earn about 1.5 million dollars in remittances,” indicating that remittances are a big source of income or currency for many nations.