Nigeria: Naira rises to N640/$1 as EFCC interrogates BDC operators

By Akin Irede
Posted on Wednesday, 3 August 2022 21:48

Nigeria Floating Currency
A money changer counts Nigerian naira currency at a bureau de change, in Lagos Nigeria. (AP Photo/Sunday Alamba)

The naira continued to rise against the US dollar on Nigeria’s parallel market, hitting N640/$1 on Wednesday from a low of N710/$1 last Thursday.

The Africa Report has heard that operatives of the Economic and Financial Crimes Commission (EFCC) stormed various bureau de change (BDC) hubs in Lagos on Wednesday with a view to ensuring that the exchange rate remains favourable to the naira.

The visit by the EFCC to the Lagos BDC hubs comes barely five days after a raid on BDCs in Abuja.

Rise in demand

Sources within the agency told The Africa Report that they discovered that unscrupulous politicians were buying up most of the dollars on the black market ahead of the general elections planned for next February.

According to detectives, the high demand for dollars drove up the price for the dollar, thereby affecting the exchange rate.

Some of the BDC hubs visited by the EFCC on Wednesday were the Murtala Muhammed Airport, Hadji Camp, the Federal Palace Hotel, Victoria Island and Broad Street around Balogun Market.

“We interrogated some of the BDC operators and asked them why they sold the dollar at N710 last week, and they said many politicians were demanding dollars and they were willing to pay any amount. So, the traders took advantage of the high demand until it hit about N710,” said an operative of the EFCC who wished to remain anonymous because he was not permitted to speak to the press.

Market rush

The Africa Report observed that since the exchange began to tilt in favour of the naira on the black market, many desperate customers were selling off their dollars.

“Many people are now selling the dollars in their possession in order not to incur losses. Even BDC operators are scared of recording losses. The dollar is now selling for N640 and has fallen to the same level as the euro on the black market for the first time in three weeks,” said a trader.

The spokesman for the EFCC, Wilson Uwujaren, did not respond to inquiries on Wednesday. The same for Aminu Gwadabe, the president of the Association of Bureaux de Change Operators of Nigeria.

Nigeria’s currency had been facing a steady decline on the parallel market in the past year. The development had been worsened by a scarcity of foreign exchange due to Nigeria’s dwindling oil revenue, which accounts for 80% of the country’s foreign exchange earnings.

However, the currency has remained relatively stable on the official market, exchanging for an average of N420/$1. But most Nigerians, including importers and travellers, get most of their foreign exchange from the parallel market because of the scarcity of the greenback.

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