National Security Adviser and Central Bank Collaborate to Combat Forex Speculation

In a joint effort to address challenges affecting Nigeria’s economic stability, the Office of the National Security Adviser (ONSA) and the Central Bank of Nigeria (CBN) have partnered to crack down on forex speculators nationwide.

The ongoing forex crisis has triggered economic distress and widespread protests as citizens struggle to afford basic necessities. According to Zakari Mijinyawa, Head of Strategic Communication at ONSA, the collaboration aims to protect Nigeria’s foreign exchange market and counter speculative activities.

Mijinyawa explained, “This partnership will involve a coordinated effort with key law enforcement agencies, including the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service, and the Nigeria Financial Intelligence Unit (NFIU). The primary objective is to systematically identify, thoroughly investigate, and appropriately penalize individuals and organizations involved in wrongful activities within the FX market.”

The alliance seeks to leverage the expertise of these agencies to deter malicious practices, protect investor interests, and promote sustainable economic growth. It underscores the Nigerian government’s commitment to enhancing its Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework and moving away from the grey list of the Financial Action Task Force.

Mijinyawa acknowledged the commendable proactive measures by the CBN to stabilize the foreign exchange market and stimulate economic activities. However, he highlighted that the effectiveness of these initiatives is being undermined by speculators, both domestic and international, exacerbating the depreciation of the Nigerian Naira and contributing to inflation and economic instability.

To address exchange rate volatility, the CBN has initiated a comprehensive strategy, including unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureau De Change (BDC) operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.

Furthermore, the EFCC has established a 7,000-man special task force across its 14 zonal commands to combat dollar racketeers and alleviate pressure on the forex market. Despite these measures, ongoing illicit activities within the Nigerian foreign exchange market prompted the collaborative approach between ONSA and CBN to tackle these infractions.

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