Mr Bola Babarinde, a former Chairman of the All Progressives Congress (APC) in South Africa, has identified illegal foreign exchange(Forex) trading as a threat to Naira stability and eroding its integrity.
Babarinde in a statement on Tuesday said that the issue of illegal forex trading had plagued the country for decades, thereby impeeding economic progress.
He said that in the 1970s, during Nigeria’s military rule, forex trading was strictly controlled, with several bank executives and individuals prosecuted for engaging in foreign exchange malpractice.
According to him, the government enforced strict adherence to foreign exchange regulations, stabilising the value of the naira.
Babarinde noted that the measures that brought sanity to the financial sector in the 1970s had not been sustained.
“Today, the naira has lost much of its value and forex trading has largely shifted from formal institutions to an unregulated, informal market.
“One can find foreign exchange dealers, often referred to as “Forex Mallams,” operating openly on the streets, at airports, in markets and outside hotels.
“This situation not only erodes the integrity of the naira, but also stifles formal forex channels that can enhance regulatory oversight and contribute to economic stability,” he said.
Babarinde also said that Nigeria’s reliance on foreign currencies had entrenched a culture of dollar hoarding among individuals, businesses and even some public officials.
According to him, when federal allocations are disbursed to states and local governments, substantial amounts of these funds end up being exchanged for dollars or other foreign currencies.
“Rather than using these resources for development, the funds are hoarded and often kept in hidden compartments in homes or even buried underground.
“This fuelled a black-market economy and further depreciated the naira’s value.
“This practice exacerbates poverty, with funds that should be allocated towards infrastructure, healthcare, education and social services remaining unutilised, leaving millions of Nigerians struggling for basic needs.
“In an attempt to address the currency crisis, President Bola Tinubu, recently signed Executive Order 15 titled “Disclosure, Depositing, Repatriating, and Investment of Eligible Foreign Exchange and Related Matters Order.”
“With the signed executive order, Nigerians remained skeptical, especially when forex dealers operate openly on the streets without accountability,” he said.
The APC chieftain said government must demonstrate seriousness in addressing the currency crisis and take concrete steps towards achieving sustainable economic growth.
Babarinde said that as part of measures to stop illegal forex trading, government should strengthen Forex regulations through digitisation, tackling corruption and ensuring financial integrity.
He said government should also expand access to credit facilities, empower SMEs and entrepreneurs, and implement financial literacy programmes.
“Finance Minister Wale Edun, Central Bank Governor Olayemi Cardoso and other members of the National Economic Council must be transparent and proactive in addressing Nigeria’s Forex crisis.
“It is crucial for Nigeria’s economic leadership to prioritise sustainable solutions that strengthen the naira and discourage illicit forex activities.