Nigeria’s ONSA and CBN Partner to Combat Forex Speculation and Boost Economic Stability
The Office of the National Security Adviser (ONSA) has announced a partnership with the Central Bank of Nigeria (CBN) to combat foreign exchange speculation in a bid to stabilize the economy. The move, aimed at restoring order to the foreign exchange market, is part of broader efforts to enhance economic stability in Nigeria.
Zakari Mijinyawa, the head of Strategic Communication at ONSA, stated that the collaboration is necessary to address challenges impacting the nation’s economic stability. He highlighted the commendable proactive measures taken by the CBN to stabilize the foreign exchange market and stimulate economic activities.
However, these efforts have been hampered by the activities of speculators, both domestic and international, who exploit various channels to exacerbate the depreciation of the Nigerian Naira, leading to inflation and economic instability.
To address the volatility in the exchange rate, the CBN has implemented a comprehensive strategy to enhance liquidity in the forex market. This includes unifying forex market segments, clearing outstanding forex obligations, introducing new operational mechanisms for Bureau De Change operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.
Additionally, the Economic and Financial Crimes Commission (EFCC) has deployed a 7,000-man special task force across its 14 zonal commands to crack down on dollar racketeers, aiming to reduce pressure on the Naira.
Despite these efforts, recent intelligence reports indicate ongoing illicit activities within the Nigerian foreign exchange market. Therefore, ONSA and CBN are collaborating to tackle these infractions through a coordinated approach with key law enforcement agencies, including the Nigeria Police Force, EFCC, Nigeria Customs Service, and Nigeria Financial Intelligence Unit.
The primary objective of this alliance is to identify, investigate, and penalize individuals and organizations involved in wrongful activities within the forex market. By leveraging the expertise of these agencies, the government aims to deter malicious practices, protect investor interests, and promote sustainable economic growth.
This joint effort underscores the government’s commitment to improving its Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework and exiting the grey list of the Financial Action Task Force. It is also expected to enhance the stability and transparency of the foreign exchange market, boost investor confidence, and promote the nation’s economic well-being.
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