Can Emefiele deliver?

In more Nigerian legislation news, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), recently made statements that got the country buzzing. 

Speaking at the Monetary Policy Committee (MPC) on Tuesday, Emefiele said that using the naira (Nigeria’s currency) to buy dollars is illegal. The governor threatened to arrest and prosecute any perpetrators caught in the act.

Can Emefiele deliver this time?

Well, we spoke to some experts to find out, and the general consensus is no—there’s no legal backing that allows the CBN to sanction Nigeria for using their own hard-earned money to buy assets. 

According to one expert who wished to remain anonymous, it’s all “words from a man who loves to hear his own voice a lot”.

Chinyere Okafor, managing partner at Acelera Law, said, “There however appears to be no guideline, regulation, rule, or enabling law authorising the CBN to arrest and prosecute Nigerians using naira to buy dollars, or that declares the use of naira for the purpose of buying dollars illegal in Nigeria.” 

Adedeji Olowe, the founder of Lendsqr, told TechCabal that the CBN will hurt its reputation further if it brings yet another rule it can’t enforce to the market. “There is also a possibility that this can be challenged in court,” he added. 

Godwin wants to win

The experts also explain that the CBN governor’s statement is a signal of the apex bank’s desperation to bring down dollar prices and demand for foreign exchange in the country. 

Over the past 1 year, the CBN has taken a number of regulatory actions to drive down the devaluation of the naira. It banned the sale of foreign exchange to bureau de change operators in the country, and even declared the founders of AbokiFX, a forex publishing platform, wanted for devaluing the naira. Despite all this, the naira dropped from ₦525/$ to ₦570/$ within the same month. A year later, the currency has further devalued to an all-time low at ₦620/$. 

Zoom out: The CBN has come out to clarify the statement of its governor, stating that the warning was for those seeking forex for election campaigns.