COVID 19: Nigeria Begins Gradual reopening Of The Economy As CBN Resumes Sales Of Foreign Exchange To Banks With An Initial Provision of $100 million

By Suleima Umaru

 When the Asian country of Iran reopened its  economy  for business as there was  no end in sight to the Wuhan town in Hebei Province of China erupted Coronavirus last December, it set the stage for other countries to follow suit. One of such countries was   United  Kingdom , UK .others are the  European countries which  had begun gradual easing of the lock down. While from the African Continent, Nigeria had followed suit.

Last Monday, President Muhammadu in a nationwide broadcast after getting briefs  from Osagie Ehanire, minister of Health and Chikwe Ihekweazu , had  promised to begin a phased relaxation of the COVID 19, lock down in Lagos, regarded as the epicenter of the disease and the country’s Commercial nerve center, Ogun  and Abuja, the Federal Capital Territory, FCT. The decision may have given people an insight  that the President had concluded arrangement with godwin Emefiele, the governor of central Bank of Nigeria, CBN,  to start the process of  reopening  the economy.

Giving an insight to the gradual phasing  of the relaxation of the  lockdown, Babajide Sanwo-Olu, governor of Lagos State  had said on Tuesday, April 28, 2020 that the MDBs, operating in the country  have been given  approval  to reopen with effect  from Monday, May 4, 2020  but Staff will work  onlybetween 9 AM and 3 PM.

 Perhaps to  curb the  spread of the disease in the bank,  the government had said that  the maximum Staff strength  that could be found  in any branch is 60 percent of the work force while the others would operate from home. Informed sources told The Magazine that  Emefiele, the  CBN governor may have  been encouraged by the phased relaxation of the lock down to lift the suspension on   cheque clearing by the MDBs. It was temporarily suspended last March due to the out- break of the COVID 19 in the country.

Godwin Emefiele: CBN Governor

 The apex Bank was said to have stated  this in a circular  issued to all  the Banks  and  Nigeria Inter- Bnk Settlement   system  on Monday, April 27, 2020,, titled ‘Temporary Suspension  of cheque clearing  in the Nigerian clearing system’’. The  circular was said to have been signed by  Sam Okojere, Director , Banking Services   Department.The  CBN Director had said  that  they were encouraged  to  review  the need  for Cheque clearing  to accommodate  users of cheque as  one of the payment instruments in the economy, despite the lockdown  of some states and the FCT.

 Already, the  United Bank for Africa, UBA, plc, a Pan African Bank  , in its determination to carry its Customers along  with CBN, regulatory directives that may affect their business in this trying and difficult times , a  had informed them of the Bank lifting of the temporary suspension  of cheque  clearing , which became effective  on Tuesday, April 28, 2020, a day after  the Presidential broad cast on COVID 19.

This is  good news to the many Customers of the Pan African Bank  including Corporate Organisations which Cheques had been  trapped at the Clearing House because of the outbreak of COVID 19 , in the country since last February  due to the Temporary Suspension of the cheque clearing System by the CBN.

The Bank, according to The Value News sources ,had made it clear to the  Customers, particular, traders and business men, who had been making inquiries lifted cheque clearing system  sure  directive  and what it connotes  under COVID 19, were said to have been told  that‘’all cheque instruments   will now be  processed and cleared for payment’’.

The CBN, may have  moved a step  further to unlock the economy with the planned  resumed provision  of Foreign Exchange  to banks  to sell to  parents to enable them  pay  for their wards  school fees  overseas and also allow  Small and Medium Scale Enterprises, SMEs, to make  essential raw material  and Chemical imports  for their factories. There are indications that the apex Bank had concluded arrangement to  Sale  over $100 million  to the banks in order to conduct their transactions with their Customers.

Isssac Okorafor, the CBN, Director of Coporate Communications had  issued a Statement about  the resumed Sales of Foreign Exchange to  Banks  on Wednesday, April 29, 2020, stressing that   the decision was taken  in view of the government gradual  easing  of the COVID 19 lock down  ’’as a way of revamping the country’s economic activities, which had had been at the lowest ebb in the last one month’’.

The Bureau De Change, BDC, operators may not  have been  let out in the Foreign Exchange Sales arrangement . Okorafor, the CBN, Spokesperson disclosed that the bank had  made a complete arrangement to resume  Foreign Exchange sales  to the BDC, segment  of the market  for business travels, personal travels, and other designated retail cases  as soon as  international flights resume.

Going by the decision of the apex Bank to resume sales of  Forex to the  Banks and the BDC, many believe that  it has given an insight that the five International Airports in the country located  at  Ikeja, Abuja,  Enugu, Kano, and  Omagwa, Rivers state may  soon been be reopened for International flights.

Indeed, the apex  Bank may have intervened to save the naira from imminent collapse as it is currently exchanging far  above N460.00 to a dollar, on the Parallel market. The DMBs, fear that  as  most end users of Forex,  had resorted to patronising unofficial sources  of  the market to source their Forex need in the recent time  and   it is meeting their dollar needs, there is need for people to panic He is right. Only recently, the Board of Directors of the International Monetary Fund, IMF, approved a $3.4 billion loan facility to help in curbing the spread of the disese in the country.

 Aware of the feeling of Forex end users across the country, Emefiele, the CBN, governor, had said that there was no basis for such fears    as it is capable of adequately meeting the  needs  of all Legitimate Forex  end   users. This may have informed  why the CBN has declared war on Speculators and  a renewed  Crackdown on  illegal activities on the Forex  market.          

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