Forex Crisis: Go After Powerful Forces In Parallel Market Strangulating Naira, Don Tells Nigerian Govt

Professor of Economics, Sam Olofin, has charged the Nigerian government to fish out and prosecute those he called “powerful operators” in foreign exchange market and rescue the naira from imminent collapse.

He said that the the problem of Nigeria’s foreign exchange market stems from the activities of operators in the parallel market who appeared to be so powerful and were acting as visible hands, with selfish profits motives at the expense of the nation’s economy.

Professor Olofin stated this during a public lecture organised by the Nigerian Economic Society (NES) at the Faculty of Economics and Management Sciences,  University of Ibadan on Thursday.

The don who was a guest lecturer, spoke on the theme “Recent Development in Nigerian Foreign Exchange Market: Issues, Options and Way Forward.”

He said that given the activities of powerful forces in parallel market operators, the Central Bank of Nigeria (CBN) is having a near impossible task because there is no such thing as perfect market in Nigeria.

He said: “If the naira must be saved from imminent collapse, the time has come to rescue it from the hands of these powerful operators in the foreign exchange market,” Olofin stated.

“The time has come like it is in other countries that believe in the rule of law, to define what is legal and distinguished such from what is criminal. Have criminals been apprehended and made to face severe consequences for their actions?

“As things stand at the moment, merely wishing that the ‘willing buyer and willing seller’ model would do the job would be a mere fantasy. The fact is that the parallel market powerful operators are not ghosts.

“Without sounding too simplistic or offering a silver bullet that would solve the seemingly complex problems in the foreign exchange market, our attention should be focused on this powerful segment of the market, the so-called parallel or black market.

“We have succeeded either deliberately or unwittingly, in creating a monster that has been well protected. It is ruthless and hardly cares about anything else other than its selfish profit motive. It is either we bring this monster under control or allow it to strangulate the naira.”

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Since the onset of the current administration, one of the priorities has been how to stabilize the exchange rate and also bring down inflation rate which has gone haywire.

Since the naira was floated in the foreign exchange market, the value of the naira has continued to depreciation, now hovering around N1,600 in the official market and N1,800 in the parallel market.

Despite unification of the exchange rate windows, realities in the market has shown that there is still disparity of about N200.