Nigeria’s naira defies Emefiele’s ten interventions, falls by 315%

By Akin Irede

Posted on Thursday, 4 August 2022 21:53
Nigeria's Central Bank Governor Godwin Emefiele briefis the media during the MPC meeting in Abuja, Nigeria January 24, 2020. REUTERS/Afolabi Sotunde

Higher than the United States dollar when it was first introduced in 1973, the naira has witnessed a steep decline since adopting the Structural Adjustment Programme of the IMF in the mid 1980s.

Since 2014, the naira has become more unstable than ever. This also coincided with the emergence of Godwin Emefiele as the Governor of the Central Bank of Nigeria (CBN).

On Emefiele’s watch, the naira has fallen from N171/$1 in February 2014 to N710/$1 on the parallel market in July 2022, a decrease of 315%.

On the official market, the naira has fallen from N164/$1 to N419/$1, a depreciation of 155%. However, only a handful of Nigerians have the privilege of getting foreign exchange at the official exchange rate. The Nigerian Senate has therefore invited Emefiele to explain what is happening, although no date for this has been confirmed as yet.

Section 16 of the CBN Act says the exchange rate of the naira shall be determined from time to time by a suitable mechanism devised by the apex bank. Hence, the apex bank has continued to introduce policies aimed at protecting the naira especially on the parallel market including at least three devaluations between 2016 and 2021.

But the CBN claims that the latest drop in the value of naira was caused by the refusal of the Nigerian National Petroleum Company (NNPC) to remit dollars into the government’s account due to a drop in production and excessive petrol subsidies – allegations the NNPC denies.

As the naira continues to struggle, we take a look at ten interventions taken by Emefiele to protect the local currency since he took over in 2014.

Ban on Forex cash deposits

In August 2015, when the naira dipped to N250/$1, the CBN prohibited commercial banks from accepting FX cash deposits into domiciliary accounts due to the large volume of foreign currencies already on their books.

The central bank said that for foreign currency cash lodgements made prior to the policy, account holders had the option to either withdraw foreign currency or the naira equivalent.

“For the avoidance of doubt, only wire transfers to and from domiciliary accounts are henceforth permissible,” it said. The ban was lifted five months later but the naira had dipped further to N295/$1 in January 2016.

Clipping BDCs’ wings

In January 2016, in a bid to curb the activities of currency speculators on the parallel market, Emefiele announced that the bank would no longer sell FX to Bureau de Change (BDC) operators.

“Whereas the Bank has continued to sell US Dollars at about N197 per dollar to these operators, they have in turn become greedy in their sales to ordinary Nigerians, with selling rates of as high as N250 per dollar,” Emefiele had lamented. The ban lasted for about six months and was lifted in July 2016 after the naira had fallen to N377/$1.

No preference for manufacturers

In February 2017, when the naira tumbled to N520/$1, the CBN announced that it would no longer impose allocation rules for the manufacturing sector on commercial banks. Prior to this policy, banks were required to allocate 60% of FX purchases from all sources to manufacturers and other specific sectors of the economy.

However, the CBN had discovered that many importers were not using the FX they received at a subsidised rate for the mandated purpose but to benefit from the difference in the CBN and parallel market rates. This seemed to do the trick as within a week, the naira had strengthened to N450/$1.

Apart from this policy, the success of an oversubscribed $1bn Eurobond which boosted the country’s foreign reserves and allowed the CBN to pump in dollars into the system forced the naira to appreciate to about N362/$1 on the parallel market at the end of March.

Investor/Export Window

On 22 April 2017, the apex bank introduced a special FX window for exporters, investors and end users known as IEFX. The CBN said in a circular that this new platform was introduced to boost liquidity in the FX market and ensure timely execution and settlement of eligible transactions. Essentially, the window was expected to serve eligible transactions that are classified as invisibles in nature as well as transactions for bills of collection. By now, the naira had fallen again to about N405/$1.

No FX for milk

In February 2020, the CBN imposed FX restrictions on the importation of milk in order to reduce the $1.2bn Nigeria was spending on such importation yearly.

The apex bank, however, exempted six companies: FrieslandCampina WAMCO Nigeria; Chi Limited; TG Arla Dairy Products Limited; Promasidor Nigeria Limited; Nestle Nigeria Plc and Integrated Dairies Limited. According to Director, Corporate Communications Department at the CBN, Mr Isaac Okorafor, these six companies showed sufficient willingness and ability and had keyed into the CBN’s backward integration programme to enhance their capacity and improve local milk production in the country.

Naira 4 dollar

On 5 March 2021, in a bid to boost diaspora remittances and ensure FX availability that had been affected by the Covid-19 pandemic, the apex bank introduced the Naira 4 Dollar Scheme. The policy rewards recipients with N5 for every $1 they receive through licensed International Money Transfer Organisations and commercial banks.

According to CBN insiders, the policy moved diaspora remittances from an average of $6m a week to $100m. However, the naira continued to slide.

Again, CBN cripples BDCs

In July 2021, the CBN again stopped the sale of FX to BDCs, accusing them of money laundering and manipulating the forex market by receiving FX at the official rate from CBN only to sell FX at exorbitant rates.

At the same time, the central bank assured Nigerians that it had more than enough FX to meet essential needs. The central bank created an online platform for forex applications. It was also done in order to effectively monitor the exact amount of forex banks were giving to customers. By now, the dollar had hit N505/$1.

The Body of Bank Chief Executive Officers – an association of CEOs of major banks in the country – led by its Chairman, Herbert Wigwe, vowed that with the ban on BDCs, the naira would rise to N423/$1 within a short space of time, a statement that was re-echoed by the CEO of Guaranty Trust Bank, Segun Agbaje. However, the bank CEOs were dead wrong as the naira continued to fall.

Aboki FX shutdown

Angered by the falling naira on the black market which had now hit N570/$1, in September 2021 Emefiele opened investigations into Aboki FX, a website that provided live updates on exchange rates. Emefiele said he had traced the founder of the website, Adedotun Oniwinde, to London and that government officials would visit the UK to investigate him.

Emefiele accused Oniwinde of manipulating the country’s exchange rate and assuming the role of the CBN. The apex bank was also said to have frozen about 23 bank accounts traced to Onwinde and his firms. The website eventually shut down but the naira failed to bounce back.

RT 200 FX

The Race to $200bn in FX repatriation codenamed “RT 200 FX Programme” included a set of policies introduced by the apex bank in February 2022 for non-oil exports aimed at attaining the goal of $200bn in FX repatriation exclusively from non-oil exports over the next three to five years.

The programme has five components which are: the Non-Oil Rebate Scheme, Dedicated Non-Oil Export Terminal, Value-Added Exports Facility, Non-Oil Commodities Expansion and Bi-Annual Non-Oil Export Summit. In furtherance of the policy, the CBN ordered the release of N3.5bn (8.3m) in rebates to 150 exporters who took part in the scheme. According to the bank, the first and second quarters of 2022 witnessed an increased inflow of $600m due to the programme.


In a bid to discourage investments in cryptocurrency which had been a tool for circumventing the CBN’s foreign exchange restrictions and as a hedge against rising inflation, the apex bank decided to launch the eNaira ostensibly to increase cross-border trade, improve financial inclusion and boost Nigeria’s monetary policy. The eNaira, which was launched by President Muhammadu Buhari amid fanfare, was the first digital currency in Africa. But Nigeria’s crypto investments have continued to increase, according to local media.

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