When the Central Bank of Nigeria began to ration dollars due to the stringent situation of foreign exchange in the country, most Nigerians who are seeking renewal of VISA and e-commerce businesses did not know they will be caught in the web of the new policy.
The Central Bank of Nigeria began the struggle to fix Nigeria’s forex woes in 2020 when the COVID-19 pandemic impacted on oil prices.
A lot of pressure was exerted on the Nigerian forex earnings from oil which contributes over 90 per cent of forex proceeds.
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The bank introduced several policies to contain the impact of the Naira which has lost over 36 per cent of its value from N305 to N416 per dollar.
Nigeria sorts foreign exchange obligations through the official Importer and Exporter Window and the parallel market rates.
But in 2020 the CBN blocked the weekly intervention to the Bureau de Change operators and channeled to Deposit Money Banks.
Deposit Money Banks sent messages to their customers notifying them that transactions on their naira debit card has been limited to $20 per month down from $100, an action which is biting hard on their operations.
The Central Banks have been unable to handle the FX pressure on the Nigerian economy as businesses are given around 10 per cent of their demand, according to the Manufacturing Association of Nigeria.
Oluwatobi Samson who owns an e-commerce website said his website has been shut down because he could not renew his hosting plan using his naira debit card.
He said, “I tried to renew my hosting plan but the card was rejected due to the limit placed on the card. Eventually my account got suspended and I have not been able to get it back online.
“My bank advised me to apply for a dollar card which they said will take a minimum of seven working days for it to be ready. This means that my e-commerce website will remain shutdown pending when I’m able to renew my hosting plan.
The e-commerce owner said for him to perform some transactions with his naira debit card, he had to use multiple ATM cards belonging to friends.
Another Nigerian, Emeka Jones said he has not been able to renew his VISA for weeks due to the $20 limit placed on naira debit cards by banks.
He told THE WHISTLER that he needed 300 EUR to pay for the renewal of his Canadian VISA.
“I tried severally to make payment for my VISA renewal but it failed. My bank advised me to go for the dollar debit card,” he told THE WHISTLER.
Commenting on the frustrations of Nigerians and businesses, the Chief Executive Officer of the Centre for the Promotion of Private Enterprises, Muda Yusuf, said the situation will affect e-commerce activities in the country.
Yusuf said, “The forex situation is becoming increasingly scarce. It is a reflection of the lack of liquidity in the forex market. It shows that the situation is getting a bit more serious. That is why the CBN had to come up with that kind of guideline.
“And what that will do for those who need a lot of forex, they will just go and acquire a lot of ATM cards. They will go and open more accounts.”
He said when some people are caught with planty ATM cards, “this situation is the kind of thing that leads to that and all of this is a reflection of the dysfunctional foreign exchange policy framework.
He said what is causing all the crisis is that huge gap between the official price of N416 and the over N570 per dollar sold at the parallel market.
“There is now a lot of pressure on them and they decided to ration. Even in the official window, they are still rationing. If you ask for $10,000, maybe they will give you $1000 or $500. What are you going to do with it?”