CBN Should Stop Squandering Nigeria’s Forex
Late last month, the Central Bank of Nigeria instructed banks to publish the names and Bank Verification Numbers (BVN) of customers who abuse its forex policy. The apex bank lamented that it had received, and noted with concern, reports of sharp practices “by some unscrupulous customers,” circumventing the new CBN policy on the sale of forex for overseas personal and business travels”. The bank said some of the unwholesome practices included the use of fake visas and cancellation of air tickets after the purchase of PTA/BTA.
Travellers must return unused PTA/BTA within two weeks as stipulated in the customer declaration form signed by them, so says the CBN. If not utilised for the intended purpose, or if for any reason, the scheduled trip is cancelled, the PTA/BTA must be returned. So, Godwin Emefiele and his men expect Nigerians to return unutilised PTA/BTA? I don’t think this can ever happen. The CBN is being unrealistic.
How will the banks know those who purchased PTA/BTA and turn around to cancel their flight tickets? So, our banks are expected to have financial crime units and operate like EFCC and the Police? This task is preposterous.
Why won’t there be unwholesome practices in the purchase of PTA/BTA, when there is a huge gap between the official rate of forex and that of the parallel market? As of yesterday, those who got PTA/BTA from the banks and decide to join the “dubious travellers club” will make a profit of N133 on every USD purchased. The CBN is evidently encouraging corruption with this policy of selling PTA/ BTA at official rate.
Sharp practices will persist in the purchase of PTA/BTA because of this huge gap between official and unofficial forex rates. The CBN knows this. Purchasing PTA/BTA is big business because there is big profit in it. Bank customers can apply for PTA/BTA once in a quarter, and PTA/BTA requests are limited to a maximum of $4,000 and $5,000 per quarter, per applicant, respectively. With this, and at current rate, crooked travellers can make a profit of at least N2.2 million annually just buying PTA/BTA, without actually travelling.
The CBN has simply been wasting this country’s forex by selling PTA/BTA at official rates. The era of multi forex exchange rates must end. The IMF and the World Bank have persistently told the Nigerian government this. Government forex must be sold at market rates. This will naturally eliminate sharp practices in the purchase of official forex, the PTA/BTA inclusive. A country struggling with forex can’t be selling the limited amount it has at dubious rates.