Uche Usim, Abuja and Adewale Sanyaolu
A financial expert has warned against the devaluation of the Naira as the banks in the country are grappling with foreign exchange (forex) scarcity.
This might be unconnected with the low oil revenue accruing to the Federal Government as a result of the COVID-19 pandemic.
Some customers who had domiciliary accounts have tough time accessing their funds.
One of the customers told Daily Sun that his attempt to withdraw about $5,000 from his domiciliary account in one of the second generation banks in Ogba area of Lagos met brickwall last Friday. He said all efforts to explain to the cashier at the Forex Desk on the urgent need of the funds did not yield any result as the officer claimed to be in possession of $400 which was already being processed for customer.
The situation was the same for majority of customers who spoke to Daily Sun on the development, saying the situation remained an embarrassing one for him.
A senior official in one of the second generation banks admitted that, indeed, banks were battling with forex supply challenges due to the dwindling oil price which is currently trading at less than $50 per barrel.
‘‘The information you have at your disposal is true. Many banks are battling with foreign exchange crisis because the supply they get from the Central Bank of Nigeria (CBN) was not enough to take care of the customers’ demand.
What we now do is to tell our customers to do transfer rather than withdraw cash. But we still have some that insist on withdrawing cash. For that category of customers, we must look for ways to source the funds for them. But I must tell you that it has not been easy.
In the wake of the coronavirus pandemic, oil prices fell to an all time low of less than $20 per barrel, forcing many International Oil Companies (IOCs) to cancel their projects.
Meanwhile, a professor of capital market and former Imo State Commissioner of Finance, Uche Uwaleke, reacting to the hiked forex rate (devaluation) by the Central Bank of Nigeria (CBN) at the weekend said the move would hurt the economy.
The apex bank officially changed the exchange rate of the naira to the dollar from N361 to N379 on its website last Saturday.
According to the don, the recent upward adjustment, which is largely in response to the conditions for drawing down on the recent International Monetary Fund (IMF) Rapid Financing Instrument (RFI) facility, will hurt the economy in the short term.
Uwaleke said: “In the short term, the implication of this devaluation is that it will likely hurt the economy and bring some pains to most Nigerians given the country’s import dependent nature and over reliance on oil revenue.
“The cost of importation of critical raw materials for SMEs including import of petroleum products which hitherto were subsidized at the official window will rise.
“The result will be more inflationary pressure on an economy already challenged by COVID-19 and insecurity which have combined to disrupt output especially in the agriculture sector”.