The Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, announced on Thursday that the Nigerian Naira is significantly undervalued, according to economic modelling using purchasing power parity.

This revelation came during a lecture titled ‘Diaspora Remittances and Nigeria Economic Development’ held at the National Institute of Security Studies (NISS) in Abuja.

“If you were to conduct an economic modeling of Nigeria using purchasing power parity, you would discover that the Naira is currently significantly undervalued,” Shonubi stated.

He emphasized the need for stringent measures to control illegal remittances and direct them into appropriate channels to maximize economic growth.

Shonubi also said that a panel would be set up to conduct surprise visits to banks suspected of illegally selling dollars.

“We need to name and shame commercial banks involved in such malpractices,” he said.

The acting governor further highlighted the challenges with the current remittance system, where the cost of sending money to sub-Saharan Africa from the diaspora stands at around 8-9% per $100, the highest in the world.

Interestingly, he explained, Nigeria received approximately $16.7 billion in remittances, but the bulk of this money remains outside the formal market.

“We are striving to encourage individuals to bring money into the formal sector instead of relying on informal channels, as it has become challenging to manage,” Shonubi added.

Despite efforts to incentivize individuals to engage in formal market transactions by offering a rebate of N5, this approach has proven ineffective in the open market setup, leading to the discontinuation of the N5 rebate.

However, Shonubi acknowledged the importance of incentives to attract individuals to the formal market.

Additionally, Shonubi announced a change in terminology, stating, “We will rename the foreign exchange market, known as the I & E market, to the Nigerian Foreign Exchange market, as it is the sole market we acknowledge.”

The Commandant of the National Institute of Security Studies, Ayodele Adeleke, reiterated the importance of the lecture series in broadening the understanding of security issues in the country.

He noted that the series was part of strategies embedded in the modus of the 10 months Course to promote and provide a focal point for the program.

Adeleke added, “As economies have become more interconnected, diaspora communities play pivotal roles in developing the economies of their own countries, thereby contributing to their economic growth.”

IconicR:
Everything will be fine

IconicR:
Everything will be fine

BabaIbo:

😂😂😂🤣🤣🤣

I'm waiting for you guys to start blaming Obasanjo, Goodluck and Buhari for the aftereffects of your master's inefficiency, hasty and not well thought decisions regarding Nigeria's economy.

Acekidc4:
Why will Naira not fall when all we do is to import everything even up to ordinary Tooth pick. Let's start Producing and Manufacturing at least 60 percent of things we import and watch our Naira regain it strength.

Some will still talk nonsense on my Mentions!!

IconicR:
Actually and truthfully Jonathan and Buhari are responsible for all these rubbish and not the new government who is trying to put things back on track

BoldBrainz:
This CBN is a funny institution.

- You'll "soon" start naming and shaming commercial banks involved in illegal racketeering of dollars after over 15years that the practice has been in place?

- You want to encourage forex imports from the Diaspora and you're offering a 5 naira rebate when the politicians who are buying up, hoarding and trading these dollars in the open markets at profit rates of at least 50 naira per dollar? Why would I give up an opportunity to earn 50 naira per dollar for your 5 naira kickback, if I'm not mad.. ?!

- And why won't your currency be undervalued when you produce nothing, manufacture nothing, hardly produce locally made goods, have an economy whose 80percent foundation is firmly rooted on the back of another country's currency, and you're thoughtlessly still even trying giving that currency the open air liberty to be swayed in whatever direction the market forces take it?! Same market forces being hugely determined by cabals of elites that are rather bent on putting the Nation on her knees, so long as they make stupendous monies?

Sense is far from you people!