Nigeria has introduced foreign exchange controls in a bid to prop up its currency,
These
limits on foreign currency use have been expanded over the past year,
and now include a ban on the use of Nigerian bank cards for payments or
withdrawals overseas
Earlier this month, Nigerian
President Muhammadu Buhari confirmed for the first time that the Central
Bank of Nigeria would no longer allow foreign exchange transactions for
payments for study abroad.
This means that parents who
need to acquire foreign funds to support their students abroad must now
do so outside of official channels, at a much higher exchange rate, or
via foreign currency accounts held abroad.
Nigeria is limiting the use of foreign currency in a bid to fight off downward pressure on the naira.
The collapse in world oil prices has led to a steep decline in foreign
currency revenues coming in to the country, and to a corresponding
erosion in Nigeria’s foreign currency reserves. The CBN appears to be
moving to protect its remaining forex reserves, in part so that those
funds can be used to prop up the naira.
In informal markets, the exchange rate was reportedly running as high as N385–N420 per US dollar as of late-February 2016.
This gap sets up a stark contrast between official and “unofficial”
exchange channels where Nigerians can expect to spend twice as much for
forex outside of CNB-sanctioned transactions. The CBN intervenes from
time to time to make forex available at the official interbank rate but
it is nowhere close to keeping up with demand.
No forex for study abroad
Nigerian President Muhammadu Buhari announced the government’s decision to limit forex for study abroad in an interview with Al Jazeera
earlier this month. “Those who can afford foreign education for their
children can afford it but Nigeria cannot allocate foreign exchange for
those who decide to train their children outside the country,” said the
President. “We just can’t afford it. That is the true situation we are
in.”
People about this matter over Twitter with the trend "Buhari Is Not A Magician" bellow;
"Buhari Is Not A Magician" Trending As— Kelechi Duru (@iamfatdon) September 1, 2016
Naira Hits N425/$ At Black Market @Gidi_Traffic pic.twitter.com/HwLXIcEibe
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