The Senate, on Wednesday, resolved to invite the Governor of the Central Bank of NigeriaGodwin Emefiele, on the naira’s free fall in recent weeks.
Emefiele was asked to appear before the full Senate and address lawmakers behind closed doors.
Lawmakers, however, did not set a date for the governor’s appearance. On Wednesday, lawmakers also decided to start a two-month recess that will end on September 20.
The resolution to invite the CBN chief was a continuation of deliberation on a motion by Ekiti Senator Olubunmi Adetumbi.
The move comes amid the rapid depreciation of the naira.
PREMIUM TIMES reported how the Naira fell significantly against the US dollar in the official market on Tuesday. It opened at N427.30 and closed at N431.00 per dollar.
In the parallel market, the exchange rate rose to N670 per dollar and, as of Wednesday morning, was pegged at N716 per dollar, although it fell briefly to around N670 per dollar on Wednesday night.
Movement
In his presentation, Mr. Adetumbi recalled how the CBN previously indefinitely stopped foreign exchange sales to Bureau de Change (BDC) operators due to fraudulent acts; one measure, he said, triggered the exchange rate rise.
He expressed concern that the import-export window meant to meet the foreign exchange needs of trading giants has become a rare opportunity that only a privileged few can access.
“The two instruments of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) could only serve less than 20 percent of the total demand for foreign exchange by travelers and companies,” he said.
“This and many other factors have contributed to the shortage of foreign exchange in Nigeria today.
“Yesterday, the exchange rate was 670 (naira per dollar). And this afternoon it has risen to 716,” said the legislator.
He called on CBN to take a new measure to curb the current shortage and address the slippery exchange.
failure penalty
Contributing to the motion, another Ekiti senator, Biodun Olujimi, said there was a need to penalize someone for missing and free falling naira “and that is the CBN”.
Most of what is happening, he explained, is because people take the dollar out, sell it, and bring it back.
He wondered why ‘BDCs were closed down and prevented from selling’. However, PREMIUM TIMES’ checks show that the BDCs were not closed or prevented from being sold. The CBN just stopped selling them dollars (at subsidized rates) and asked them to earn their own dollars independently.
Ms Olujimi also lamented how airlines are closing and the price of Jet-A1 fuel is skyrocketing.
“What is happening to the dollar is a replica of what is happening to Nigeria. We are bleeding and bleeding a lot.”
Niger Senator Sani Musa complained that Nigeria does not export but imports and economic policy refuses to address the problem.
He said that the CBN policy opens a loophole where the value of the naira cannot be determined. And this can be remedied if parallel market trading is allowed.
“Naira will continue to appreciate until we start manufacturing.”
Katsina Senator Babba Kaita said the main problem that needs to be addressed is insecurity, on which many good economic policies would thrive. He feared that no one would come to invest in Nigeria until the issue of insecurity is addressed.
Resolutions
Subsequently, the Senate urged the CBN to intervene urgently to stop the rapid decline in the value of the naira relative to the dollar and other international currencies.
It also directed its Banking, Insurance and Other Financial Institutions Committee to conduct an assessment of the CBN Intervention Funds and the decline in the value of the naira to find sustainable solutions.
Although it is unclear when Emefiele is expected to appear before the Senate, lawmakers have embarked on an eight-week recess and are expected to resume on September 20.
It is also unclear whether they will call an emergency session to meet with the CBN chief.