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Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by nex(m): 8:33am On Jan 08, 2016
Nigerians, both home and abroad, have been feeling the bite of the foreign exchange restrictions imposed by the Central Bank of Nigeria (CBN) on since 2015. Bureaus De Change (BDCs) have been made to pass through several new regulations in order to remain in operation, and citizens, both home and abroad, wake up everyday to find out they can’t pay for what they used to anymore. Importers are stuck in limbo, travelers don’t know what to expect on trips, and students in foreign universities have been turned to debtors.





Despite all the pains and confusion caused by these policies, it would interest Nigerians to know that Government and Government officials remain keen on transacting in American Dollars. It may surprise most of you to know that Nigeria’s Budget 2016 is still based on the prices of crude oil in dollars amid all the talks of diversification of the economy, and restriction on FOREX.



The N3.6 billion dollars budgeted for BMW cars will not be paid in Nigeria to Bavaria Motor Works, but in dollars. This is at a time when Innoson Motors and Stallion Motors which are both producing cars in Nigeria will shout “Hallelluyah” at the Naira equivalent, which will create more jobs, and deepen automotive technology advancement in Nigeria.





It will appear that the Nigerian Government prefer spending dollars to Naira, but it also prefers to receive payments in dollars over its own legal tender. Recently, Africa’s largest telecommunications company, MTN was slapped with a $5.2 billion fine for not disconnection about 5.2 million phone lines. The first day Nigerians first heard this fine, we believed it to be a N5 billion but according to the regulatory body, Nigerian Communications Commission, the penalty was calculated at $1,000 per defaulting MTN line! How so?! Why dollars? As much as some of us have tried to create some logic by explaining the possibility of a typographical error which may have exchanged “N” for “$”, the regulatory body insists and maintains that its fine is in USD.



So what exactly inspires this preference of foreign currency over the Nigerian legal tender? In the case of the MTN fine, it is so ridiculous that the NCC has reduced the fine to $3.9 billion, but let’s face things square, no company is will be the scapegoat to foot 15% of your national budget. It has never happened in the history of humanity, and it will never happen! Even though the NCC has slightly reduced that fine in a “show of mercy”, but we should admit our mistakes when them.






We must have a clear economic direction in this country. We’re either restricting FOREX from the entire system or we are not. We’re either growing our economy or we’re not. We’re either encouraging foreign direct investment, or we’re killing off the existing foreign investors who have dared to succeed within all the peculiarities of Nigeria.


SOURCE: http://www.barbaric.com.ng/cbns-forex-restrictions-and-governments-obsession-with-dollars

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Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by prettyG: 8:51am On Jan 08, 2016
does NCC have an economist working for them? if they did they will know that this is ridiculous.

1 Like

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by nex(m): 11:14am On Jan 08, 2016
Basically, NCC just picks figure from thin air. They have no clue how many jobs will be lost, and how much worse the economy will get if they continue to enforce this fine that is based on no sense at all. I don't blame them though they know nothing about economics. $5.2 billion! LOL!

CBN and the Nigerian Government though they can do better. You can't be telling people to spend less dollars while you want to spend more.

8 Likes 2 Shares

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by kennyman2000(m): 11:28am On Jan 08, 2016
Hmmmmm.... Nigeria is a joke..

You may be interested in this deal.. Check it out.. https://www.nairaland.com/2822939/winner-member-could-make-money
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Donkunxex(m): 11:29am On Jan 08, 2016
cool
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Dee60: 11:29am On Jan 08, 2016
You made some point.

BMW will be bought from a Nigerian company in Naira. Nigeria's budget is in Naira.

When FG is dealing with a multinational they would put the charge in dollars. That is a revenue and not an expenditure and it is the right thing to do. Shipping companies, airlines all pay their dues in USD. That shores up our USD reserve.

Yes, there must be a direction.

However, in a situation where USD earnings of FG had dropped from USD40billion per annum to USD15billion per annum, and could still drop further with lower oil prices, it simply cannot be business as usual.

Nigeria does not have the USD reserve to fund import of tooth picks, champagne, pencils, coloured water, owambe lace, etc.

We have to check our unbridled apetite for anything foreign, from Vienna lace to Chinese all what not!

FG has to sit up and find how to galvanise Nigeria into an exporting country like INDIA and not one that is controlled by speculative stock markets. Also, the idea to increase taxes, levies (like they are doing to MTN) does not make sense at the moment. They need to galvanize more and more production and not do the opposite.

If FG kills businesses, what will be left to provide employment for the millions of youths that are currently unemployed. You are right, there doesnt seem to be a clear direction.

When are they going to discuss and act on the Nigeria project? In fact, what is the Nigeria project? Do we have one?

24 Likes 1 Share

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by frodobee: 11:30am On Jan 08, 2016
When I checked the source- Barbaric Muhammed- I said WTF why are you wailing? Are you not the cause?

4 Likes

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by lifestyle1(m): 11:30am On Jan 08, 2016
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by fpeter(f): 11:30am On Jan 08, 2016
Na dem sabi undecided
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by godoluwa(m): 11:32am On Jan 08, 2016
PRESENT ADMINISTRATION IS A JOKE.

8 Likes

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Lordtrillion(m): 11:32am On Jan 08, 2016
Hmm, na wa oh undecided
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Emmanuel125(m): 11:33am On Jan 08, 2016
Na dem sabi oooo...but Cool
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Vision4God: 11:35am On Jan 08, 2016
Alll izz weelll
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by 4hys: 11:35am On Jan 08, 2016
a k
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Built2last: 11:36am On Jan 08, 2016
Can anybody remember what our president said when they asked him questions on restrictions of FX and card transactions?

Can anybody show me the economic policy document of this administration.

Be reminded that while we applaud them for fighting corruption, 7 months after, nobody is in jail.

All we hear is noise while the gullible are kept busy in the guise that the fight is on.

From August to November, they kept us busy with Saraki/versus CCB. Today it's Dasuki versus cash distribution. ..give the Dasuki case till April....The case will die natural death...We will all forget it.

We were told some people returned money. Why in heavens name will you shield them. How are we to verify such claims.

At all times government must find something to keep the gullible busy.

My position is this, while you paint a picture that you are fighting corruption and facing security, give us good economic direction. Formulate policies that will boost investors confidence...create jobs...budget was pegged at 38 dollar per barrel as I type today it's at 33 per barrel. ..

I don't understand. ..If you understand the economic direction, please educate me.

16 Likes 2 Shares

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by oc2fish: 11:36am On Jan 08, 2016
Difficult situation especially for students studying abroad on scholarship by TETFUND. The situation is so bad that many might abandon studies. This are graduate level degrees. Lecturers wanting to be exposed to world class facilities so that they can impact knowledge.

Sir Buhari please.
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by docadams: 11:37am On Jan 08, 2016
Hmmmmmmm

What's happening here? Only 13 comments and thread is already in promise land.

Seun, lalasticala, Mnyd44, hope all is well.
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by reyscrub(m): 11:38am On Jan 08, 2016
Let keep watching
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Smartsyn(m): 11:39am On Jan 08, 2016
What is good for greece is good for uganda


If we want to make the naira strong by restricting dollar, it should affect everybody, not some set of persons. Thanks

3 Likes

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by busomma: 11:42am On Jan 08, 2016
It must be noted that $ is international currency being quoted by every country in the world as a yardstick in pricing commodities, Nigeria inclusive. With regards MTN fine, the law must be obeyed by all organizations doing business in this country. Allowing mtn to go Scott free portrays Nigeria as a lawless country.

1 Like

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by ozoemenafn: 11:42am On Jan 08, 2016
Frankly speaking the regulatory body on this regards slammed an unrealistic fine to MTN. Most importantly, the government should take conscience of the adverse and negative impact of these steps and call them to order.

2 Likes

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Realdeals(m): 11:43am On Jan 08, 2016
Dee60:
You made some point.

BMW will be bought from a Nigerian company in Naira. Nigeria's budget is in Naira.

When FG is dealing with a multinational they would put the charge in dollars. That is a revenue and not an expenditure and it is the right thing to do. Shipping companies, airlines all pay their dues in USD. That shores up our USD reserve.

Yes, there must be a direction.

However, in a situation where USD earnings of FG had dropped from USD40billion per annum to USD15billion per annum, and could still drop further with lower oil prices, it simply cannot be business as usual.

Nigeria does not have the USD reserve to fund import of tooth picks, champagne, pencils, coloured water, owambe lace, etc.

We have to check our unbridled apetite for anything foreign, from Vienna lace to Chinese all what not!

FG has to sit up and find how to galvanise Nigeria into an exporting country like INDIA and not one that is controlled by speculative stock markets. Also, the idea to increase taxes, levies (like they are doing to MTN) does not make sense at the moment. They need to galvanize more and more production and not do the opposite.

If FG kills businesses, what will be left to provide employment for the millions of youths that are currently unemployed. You are right, there doesnt seem to be a clear direction.

When are they going to discuss and act on the Nigeria project?

You talk sense pass!
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by bigtt76(f): 11:46am On Jan 08, 2016
Agreed that the Nigerian government will buy in Naira, but the company supplying pays in dollars abroad .....where do they source this from? CBN Governor is just a joker and needs to be sacked fast before its too late! grin
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by imsuboi(m): 11:49am On Jan 08, 2016
we are back to 1985 grin

3 Likes

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Dee60: 11:50am On Jan 08, 2016
busomma:
It must be noted that $ is international currency being quoted by every country in the world as a yardstick in pricing commodities, Nigeria inclusive. With regards MTN fine, the law must be obeyed by all organizations doing business in this country. Allowing mtn to go Scott free portrays Nigeria as a lawless country.

Not many people will agree with you. So what law has MTN broken to warrant a $5biillion fine? I am not on the side of MTN, but the massess must be joking to think MTN will pay that and they wont inflict the pain on the common man on the street! I feel there is no single corporate entity in the whole of Africa that can pay that kind of fine and still survive. This thing will cause a rift between Nigeria and SAF and I dont think Africa needs that now.

2 Likes

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Pavore9: 11:52am On Jan 08, 2016
Sighs.....
Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by UncleJudax(m): 11:57am On Jan 08, 2016
Dee60:
You made some point.

BMW will be bought from a Nigerian company in Naira. Nigeria's budget is in Naira.

When FG is dealing with a multinational they would put the charge in dollars. That is a revenue and not an expenditure and it is the right thing to do. Shipping companies, airlines all pay their dues in USD. That shores up our USD reserve.

Yes, there must be a direction.

However, in a situation where USD earnings of FG had dropped from USD40billion per annum to USD15billion per annum, and could still drop further with lower oil prices, it simply cannot be business as usual.

Nigeria does not have the USD reserve to fund import of tooth picks, champagne, pencils, coloured water, owambe lace, etc.

We have to check our unbridled apetite for anything foreign, from Vienna lace to Chinese all what not!

FG has to sit up and find how to galvanise Nigeria into an exporting country like INDIA and not one that is controlled by speculative stock markets. Also, the idea to increase taxes, levies (like they are doing to MTN) does not make sense at the moment. They need to galvanize more and more production and not do the opposite.

If FG kills businesses, what will be left to provide employment for the millions of youths that are currently unemployed. You are right, there doesnt seem to be a clear direction.

When are they going to discuss and act on the Nigeria project? In fact, what is the Nigeria project? Do we have one?
The government is super clueless. Apparently, it wants us to consume local goods...I guess BMW is a Gwagwalada based Auto company. Smh

Again, since CBN started this dollar restriction craze, Naira has fallen to an all-time low. Still, they keep doing the same thing...acute stupidity?

6 Likes 1 Share

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Nobody: 11:58am On Jan 08, 2016
Its a government of hypocrisy just like its citizens. We deserve the government we have because its a reflection of the average Nigerian. Tell me, the people in power, are they not Nigerians like you and I?

6 Likes 1 Share

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by Nobody: 12:08pm On Jan 08, 2016
nex:
Nigerians, both home and abroad, have been feeling the bite of the foreign exchange restrictions imposed by the Central Bank of Nigeria (CBN) on since 2015. Bureaus De Change (BDCs) have been made to pass through several new regulations in order to remain in operation, and citizens, both home and abroad, wake up everyday to find out they can’t pay for what they used to anymore. Importers are stuck in limbo, travelers don’t know what to expect on trips, and students in foreign universities have been turned to debtors.


Well....we have to stop dollars from flowing out of the country because.....we need dollars to prop up the naira. A situation brought upon us by the fall in oil prices.

Keep in mind that in 2012....oil was 111 dollars, now it is 33 dollars today. That means we no longe rhave enough dollars flowing into the treasury from our main era...oil.....meanwhile we need to prevent ourselves from falling into a devalued currency....so we restrict dollars.


Despite all the pains and confusion caused by these policies, it would interest Nigerians to know that Government and Government officials remain keen on transacting in American Dollars. It may surprise most of you to know that Nigeria’s Budget 2016 is still based on the prices of crude oil in dollars amid all the talks of diversification of the economy, and restriction on FOREX.

Well, what did you expect?

We are still selling oil.....and the oil is paid for in dollars....which go into the treasury to prop up the naira mostly.

The forex restrictions ARE there to prevent dollars from leaving the country. The budget is based on the price of oil....by extension....dollars flowing into the country(from our selling oil)


Sigh.

The N3.6 billion dollars budgeted for BMW cars will not be paid in Nigeria to Bavaria Motor Works, but in dollars. This is at a time when Innoson Motors and Stallion Motors which are both producing cars in Nigeria will shout “Hallelluyah” at the Naira equivalent, which will create more jobs, and deepen automotive technology advancement in Nigeria.

Yes....and that is one of my major problems with the new budget. But paying/buying from to Innoson and Stallion....will still lead to dollars leaving the country...because both companies assemble cars from parts made abroad.

So, even with buying from those two....dollars still leave the country. Just like the same scenairo buying from BMW.

You see the palaver?

At this point.....I must say that Ajaokuta must be revived. If it isn't revived, manufacturing cars in this country is going to be still problematic.

Back in the 70's...we built lotsa car assembly plants....with all the parts made outside....and assembled in Nigeria. Once the oil prices crashed in the 1980's...it become difficult to continue along that path because....it got too expensive to assemble cars in Nigeria. By 1994....only Peuguot was assembling cars....and at 30 cars a day. Down from 150 in 1981.


It will appear that the Nigerian Government prefer spending dollars to Naira, but it also prefers to receive payments in dollars over its own legal tender. Recently, Africa’s largest telecommunications company, MTN was slapped with a $5.2 billion fine for not disconnection about 5.2 million phone lines. The first day Nigerians first heard this fine, we believed it to be a N5 billion but according to the regulatory body, Nigerian Communications Commission, the penalty was calculated at $1,000 per defaulting MTN line! How so?! Why dollars? As much as some of us have tried to create some logic by explaining the possibility of a typographical error which may have exchanged “N” for “$”, the regulatory body insists and maintains that its fine is in USD.

Because, my friend, the government needs the dollars to prop up the currency.....that is why it accepts payments in dollars.

Really, is it that difficult to understand.!?


So what exactly inspires this preference of foreign currency over the Nigerian legal tender? In the case of the MTN fine, it is so ridiculous that the NCC has reduced the fine to $3.9 billion, but let’s face things square, no company is will be the scapegoat to foot 15% of your national budget. It has never happened in the history of humanity, and it will never happen! Even though the NCC has slightly reduced that fine in a “show of mercy”, but we should admit our mistakes when them.

So we should let MTN take us for a ride....

Nigeria is in a mess because we have forgiven too many sins without demanding for repentance. It is really very easy to forgive....but it has to be accompanied by change.


We must have a clear economic direction in this country. We’re either restricting FOREX from the entire system or we are not. We’re either growing our economy or we’re not. We’re either encouraging foreign direct investment, or we’re killing off the existing foreign investors who have dared to succeed within all the peculiarities of Nigeria.

1.We are restricting forex because we cannot afford to lose the naira.....unless you want us to devalue....and watch as we end up using dollars rand, and pounds for daily purchases in Nigeria...because $1 is now N1,000,000,000!

2.Yes....PMB should not be buying cars from BMW....He should not buy cars period. But if he bought from Stallion and Innoson , it would still lead to dollars leaving the country....because both companies assemble cars from parts made outside the country.

3.If you want foreign direct investment....fix power supply, end corruption, and end lawlessness. Simple., really.

4.And if you are a foreign investor...you better come in here and obey our laws. Airtel is a foriegn company...who have not been punished by NCC because (presumably) they obey our rules.

I rest my case.

5 Likes 1 Share

Re: Cbn’s FOREX Restrictions And Government’s Obsession With Dollars by UncleJudax(m): 12:10pm On Jan 08, 2016
charix:
Its a government of hypocrisy just like its citizens. We deserve the government we have because its a reflection of the average Nigerian. Tell me, the people in power, are they not Nigerians like you and I?
Tushe!

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