Many business people have expressed fears that the rising dollar scarcity if left unchecked will lead to shutdown of many businesses and negatively impact an economy already struggling as a result of the Covid-19 pandemic. The scarcity according to analysts is as a result of the economic meltdown occasioned by the dilemma of the COVID-19 pandemic and low oil prices resulting in little foreign exchange inflow. The National Bureau of Statistics (NBS) in its latest data shows that proceeds from crude oil exports accounted for 72 percent of Nigeria’s forex earnings in Q2 2020.
With low oil prices, Nigeria has been earning less than it used to from crude oil export — the major reasosn for the tight forex situation. Though the Governor of the Central Bank of Nigeria Mr. Godwin Emefiele, promised investors that the apex bank will attend to all forex demands and that the external reserves can support eight months of imports, businesses are already feeling the brunt. Moreso, many customers have been unable to make withdrawals from their domiciliary accounts across the commercial banks. In many banks, customers can only send FX interbank to a related party (someone related to you in name), while some banks are willing to pay the naira equivalent of the forex in customer’s domiciliary accounts for those who want to make withdrawals.
According to one of the major banks, “we are in a very difficult situation as we are meant to manage both people who have inflows and want cash as well as customers who deposit cash and want cash. We sometimes experience a situation where there are a lot of inflows and customers wanting to withdraw cash thus putting pressure on the liquidity. And we have to give everybody something.” The source added that “we don’t want a situation where customers come in and we can’t even meet part of their demand. In some cases, we pool from other branches to meet that demand but that also comes with a waiting period because we can’t anticipate how much FX demand we’ll get.”
Many banks have in the last two months reduced the dollar spending limit on naira debit cards with some setting the limit as low as $50 per month, a development that has adversely affected e-commerce and related businesses the most.