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Buhari regime destroying Nigeria’s economy with reckless forex policies: World Bank

The global bank said the FG’s exchange rate management policies “continue to discourage investment and fuel inflation.”

• November 29, 2021
CBN Godwin Emefiele (credit: Bloomberg)
CBN Governor, Godwin Emefiele (credit: Bloomberg)

The World Bank has again noted the negative effect of Nigeria’s Central Bank exchange rate management  policies, stating that it discourages investments and fuel inflation.

The World Bank made the observation in its November edition of its Nigeria Development Update tagged “Time for Business Unusual”.

“The government’s exchange rate management policies continue to discourage investment and fuel inflation.

“Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market,” the report said. 

The report covered the pressure the naira faced at the exchange window, as the apex bank had raised the official exchange rate three times since the onset of the COVID-19 pandemic.

The World Bank criticised CBN for lacking the flexibility to respond to changes at the foreign exchange market.

“FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation,” the report said. 

The World Bank first made these comments in the report’s first edition released in June, after the CBN formally unified both official and IEFX rates.  

The naira has seen multiple downward trends at the foreign exchange market as the apex bank continues to enforce questionable economic policies.

In an attempt to salvage the failing naira’s value, the CBN has devalued the currency multiple times as reported by Peoples Gazette in February and May.

Since 2015, under the Buhari-led administration the apex bank has been expanding its control over foreign exchange, starting with the list of types of commodities such as rice and cement, that would no longer be eligible to access foreign exchange in the official Nigerian forex market.

In the same year, the bank limited the use of foreign currency-denominated Nigerian bank cards. 

In 2016, Mr Buhari said his administration was limiting forex for those seeking education abroad, reiterating his commitment to protecting the value of the naira by all means.

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