New Telegraph

Depreciation: ‘Sustained forex demand putting pressure on naira’

The continuous demand for foreign exchange to meet certain needs by individuals has been blamed for the bad shape of the naira, which has been highly depreciated against major currencies. While attributing foreign exchange demands for school fee abroad as one of the contributions to the depreciation of naira in the country, some experts said the Federal Government should not be entirely held responsible for drop in the value of the naira.

Speaking with journalists in Lagos, the Chief Executive Officer, Wyoming Capital & Partners, Tajudeen Olayinka, said Nigerians’ penchant for foreign goods had also contributed a lot to the situation. According to him, getting education within the country and patronising locally produced goods will do a lot to lift the naira beyond where it is at the moment. “Demand for forex to pay fees is a contributing factor. We know a lot of the foreign students have parents who can sustain them by way of sending money from Nigeria.” Speaking on Nigerians’ penchant for foreign goods, Olayinka said: Penchant for foreign goods and inability to manufacture quality goods locally is contributing to fall in value of naira. Apart from importing finished goods, we also import raw materials. We import everything into this country because we don’t produce quality goods here. “Poor and substandard education is part of the reasons our people are traveling abroad to acquire qualitative education and it is putting so much pressure on our currency. We need to get somethings right to strengthen the naira,” he stated. Also, a Bureau De Change (BDC) operator, Saidu Abdulrahman, at Sango-Otta, Ogun State, said more demand for FX comes from parents that have children in foreign universities and have to pay tuition fee.

Saidu further stated that bankers direct customers who are in urgent need of FX to them. “Parents paying school fees are our major customers. They can’t wait to get paid officially because time is mostly against them. It takes over two or three months before banks can process it. So, anyone, who is in a hurry, will come to the parallel market,” he said. A bank official, who works with a new generation bank, said banks could not meet all demands for school fee. According to the staff, who craved anonymity, because he’s not authorised to speak, the CBN has announced that international school fees and upkeep requests through Form A will now be processed within 120 days. “Parents, who can’t wait for banks to process their request, see parallel market as an alternative to meet their FX needs,” he said. On his part, a parent who’s child is schooling at Hulls University, United Kingdom, Oloto Oladiji, said he’s paying school fees through his nose.

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