CBN blames banks for Naira's woes, threatens sanctions

Commercial banks selling foreign currency illegally have been threatened with sanctions by the Central Bank of Nigeria (CBN).

As the forex shortage deepens and there are claims that deposit money banks are diverting most of their foreign currency to the unofficial foreign exchange market rather than selling to their customers, the allegation comes as the naira crashed to over N950 to $1 at the parallel market.

In a speech titled “Diaspora Remittances and Nigerian Economic Development” in Abuja, the acting governor of the Central Bank of Nigeria, Folashodun Shonubi, announced this.

Shonubi emphasised the value of stringent measures to limit illegal remittances and redirect them via appropriate channels to maximise economic growth.

At the occasion, Shonubi announced the creation of a commission that would make impromptu visits to banks that were allegedly selling dollars illegally.

The acting governor also highlighted the flaws in the current remittance system. He calculated that it costs roughly 8–9% of every $100 to send money from the diaspora to Sub-Saharan Africa, which is the highest cost in the world.

He, however, noted that Nigeria received about $16.7 billion in remittances, with the vast majority of the money outside the official foreign exchange market.