Nigerian Lawmakers Seeking to Oust Central Bank Head Over Crashing Naira & Deteriorating Forex Market

Central Bank of Nigeria, Image credit:

Nigerian lawmakers are seeking to oust the governor of the country’s central bank, Godwin Emefiele, over the disastrous performance of the naira against other major currencies and a worsening dollar shortage in the country.

Rep. Ali Isa from The Nigerian National Assembly delegation from Gombe State, had previously called for an investigation into CBN’s Forex policies, citing the precipitous fall of the naira against the dollar and other currencies.

While Rep. Isa has only called for an inquiry into the CBN, Rep. Mojeed Alabi from the All Progressives Congress (APC) party, expressed outrage at the governor’s unwillingness to address The House of Representatives on the matter, “Over the falling of the naira, the CBN governor and his team should be sacked,” said Alabi.

Alabi’s sentiments were also echoed by Rep. Olawale Raji from APC-Lagos, who pointed out the absurd state of the foreign currency market in the country:
“Who is in charge of our Forex, CBN or the black market? This is the only country in the world where the black market rates are quoted on television. If Nigeria were to be a normal country, the CBN governor and his team should be sacked.”
The CNB has been battling dollar shortages and a plunging naira since June 20, 2016, when the Central Bank of Nigeria kick-started the crash of the Nigerian naira by de-pegging it from the dollar. The naira plunged close to 30 percent that day.

The currency market in Nigeria has progressively worsened over the past few months as the CBN delivered another blow in late-August with the temporary suspension of nine large banks from the inter-bank Forex market, which worsened the dollar shortage in the region.

And it gets worse. According to figures in CBN’s Financial Stability Report for June, which was released today, non-performing loans have spiked above 11 percent - more than double the rate for June of last year. The report states:
“Credit risk is expected to trend higher into the second half of 2016 owing to increased loan impairments resulting from the depreciation of the Naira, inability of obligors to service foreign currency-denominated loans, as well as bank exposures to the oil and gas sector.”
The spread between official and black market rates for the naira is at an all-time high. Data from shows black market rates for the naira against the dollar at 465 today, a roughly 150-naira spread to the official rate, which is currently hoovering above 300.