Politicians mop up dollars from banks to bribe primary delegates
By Jeph Ajobaju, Chief Copy Editor
Politicians have mopped up dollars on the foreign exchange (forex) market to bribe delegates to primary elections, compounding the drawn out scarcity of the hard currency, with external reserves dipping to $38.57 billion as of 25 May.
Peter Obi disclosed through his Campaign Director General Doyin Okupe on Arise TV last week that he resigned from the Peoples Democratic Party (PDP) partly because he was asked to bribe delegates with over $2,000 each to get their votes.
The Central Bank of Nigeria (CBN) is also defending the naira with external reserves, which fuels dollar scarcity and forces banks to tighten access to forex by travellers and other legitimate users.
CBN data shows that external reserves on 25 May 2022 amounted to $38.57 billion, 10 October 2021 ($39.01 billion), 8 October 2021 ($38.39 billion).
Banks are extending the waiting period for forex, delaying travellers with urgent trips access to Personal Travel Allowance (PTA) or Business Travel Allowance (BTA).
And banks are reducing the amount of dollars a customer can spend on cards.
“Due to current market trends, we require a 30-day window to complete requests for school fees, accommodation, and upkeep,” Ecobank Nigeria Head Consumer Banking Head Korede Demola-Adeniyi explained in a statement.
The process involves a review of all documents to ensure compliance with the rules.
“In order to ensure smooth service and allow disbursement of PTA/BTA within the timeline, we request that applications are submitted with the required documentation,” she added.
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Forex market realities
“All requests are reviewed to ensure that they meet regulatory requirements. In addition, due to limited forex availability provided by the Central Bank of Nigeria, we require a 30-day period to fulfil requests for school fees, upkeep and rent payment,” Access Bank said.
“However, for PTA/BTA, we request that you submit your application 14 days before your proposed travel date to allow disbursement within the timeline.”
First Bank notified its customers of a cut in dollar access in an email, according to reporting by The PUNCH.
“Due to current market realities on foreign exchange, we’ve reviewed cross border transaction limits for the Naira Mastercard, Naira Credit Card, our Virtual card and Visa Prepaid Naira card further to $20 monthly.
“This will take effect on 1 April 2022. Also, International ATM withdrawals will not be allowed with our Naira cards at this time,” the email explained.
CBN Governor Godwin Emefiele disclosed after the last Monetary Policy Committee (MPC) meeting that gross external reserves declined from $39.28 billion at the end of March 2022.
“This was attributed to the weak accretion to the reserves from exports and the high cost of importation of refined petroleum products,” he explained.
Politicians mop up dollars
Former Association of National Accountants Nigeria (ANAN) President Sam Nzekwe said politicians are mopping up forex for their political campaign.
His words: “Part of the reasons why there is no forex is the activities of politicians. They cannot carry huge sums of naira to spend on delegates so they have changed all the whole money into dollars.
“You will see that after all the primaries, the dollar will come down. The banks don’t have dollar to give to genuine importers. Also, the speculative activities on forex are not helpful. Nigeria needs to be productive to earn more forex.”
External and internal volatility are having effects on the forex, Nzekwe added.
