In a significant development, the Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, announced that the Nigerian Naira is currently undervalued according to economic modeling using purchasing power parity. Shonubi made this revelation during a lecture titled ‘Diaspora Remittances and Nigeria Economic Development’ at the National Institute of Security Studies (NISS) in Abuja.
Shonubi highlighted the importance of taking strict measures to curb illegal remittances and channel them into proper avenues to enhance economic growth. He announced the establishment of a panel that will conduct surprise visits to commercial banks suspected of engaging in illegal sales of dollars. Shonubi emphasized the need to “name and shame” banks involved in such malpractices.
The acting governor also addressed challenges within the current remittance system, where the cost of sending money to sub-Saharan Africa from the diaspora remains high, around 8-9% per $100, making it the highest in the world. He noted that despite efforts to encourage formal market transactions by offering rebates, the bulk of remittances still flow through informal channels.
Shonubi expressed the CBN’s efforts to incentivize individuals to engage in the formal market and highlighted the renaming of the foreign exchange market, known as the I & E market, to the Nigerian Foreign Exchange market to reflect its sole recognition.
The lecture series, organized by the National Institute of Security Studies, was deemed important for enhancing understanding of security issues in Nigeria. The series aims to underscore the pivotal role diaspora communities play in contributing to the economic growth of their countries, promoting economic development through remittances and investments.
