CBN Issues Directives To Stop Foreign Exchange For Medicals, School fees

Foreign Exchange

CENTRAL Bank of Nigeria (CBN) and the Deposit Money Banks (DMBs) have resolved to stop  issuing of foreign exchange for payment of school  fees and medical bills which it said constitutes 15 per cent of foreign currency demands in the country.

Speaking in Abuja shortly after the Bankers Committee meeting on Thursday, the Director, Banking Supervision of Central Bank of Nigeria (CBN), Mrs Tokumbo Martins, noted that banks unanimously arrived at the decisions so that most of the foreign exchange demands would now be provided towards developing the real sector adding that the body was quite aware that such decision could be painful to the general public.

“You know it is something that affects all of us and I think that the watchword is belt-tightening. It is the pain we may need to go through today, short term, so that there will be long term development in the country whether it is infrastructure or manufacturing. So, the question is how we can prevent or reduce the crowding out of the real sector where there is increase in demand on the invisible.

"It is something that CBN is looking at and is something the Bankers Committee is looking at. If you think about it, the pressure on forex  now—from school fees abroad is significant. At what point should we begin to look inwards? The pressure on medicals is significant. At what point should we begin to look inwards? As Nigerians, we also need to be patriotic in terms of our sentiments. We need to think about what do and have to sacrifice today for the long term benefit of our country and the economy?” she asked

In confirming the position of the banks after the meeting, the Managing Director of Access Bank, Herbert Nwigwe, added that the banks supported the move in the interest of the economy by channeling foreign exchange to the real sector with the aim of boosting the economy.

“The problem with that is the fact that that tends to crowd out the critical foreign exchange that should be used in the real sector to import raw materials, to support industries, to encourage employment. So, there is a question around how far we are going to allow this to continue. Shouldn’t we redirect these redirect these resources towards the real sector as we should?” Nwigwe stated.

Other banks represented include Diamond Bank by its managing Director, Mr Uzoma Dozie; Standard Chartered’s Mrs Bola Adesola and Mr Ibrahim Muazu, Director, Corporate Communication, CBN.