The Central Bank of Nigeria has offered reasons for the continuous fall of the Naira.
The Naira in recent days has fallen both at the official and black markets, nearing N1,000 to $1 as at press time on Friday.
The acting Governor of the CBN, Folashodun Shonubi, offered the reason for the continuous fall of the Naira at the National Institute for Security Studies, Abuja, where he delivered a Distinguished Personality Lecture.
The lecture, titled: “Diaspora Remittances and Nigeria Economic Development,” was delivered to members of Executive Intelligence Management Course 16.
Shonubi explained that one of the major causes of the fall in Naira was because the bulk of the Diaspora remittances that comes into Nigeria in Dollar were not recorded officially and thus find their way to the black market.
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He said: “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.
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“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 of the fact 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 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.
“We have countries that earn about $1.5 million in remittances.
“Everywhere, any place you go, even in developed countries such as India, China among others.
“It would be helpful if we can work together to identify these channels because we just want the flows into the proper channels.
“There we can get maximum benefits to grow the economy.
“We talk about black markets.
“That also creates its own problems.
“Management of foreign exchange market and the efficacy of our policies to manage the exchange rate becomes difficult due to the insignificance of our diaspora remittances, which are going to other markets.
“Today, someone called me privately and said this thing (Naira) has gone up to some levels in the black markets.
“My question was: ‘What do you want me to do?’
“Do I operate in the black markets?
“I don’t know the basis of pricing in the black markets.
“The other thing people don’t realise is that because you don’t have full information, and I will give you an example, since we started I&E window, we found out that some people would deliberately wait till the last minute and do one transaction of $5,000 and that becomes the closing rate.
“We can’t do without diaspora remittances.
“For many countries, that’s their main source of income.”