As the Naira fell to N857 to the dollar on the black market on Tuesday, the Economic and Financial Crimes Commission conducted simultaneous operations on Bureau de Change operators in Abuja and Kano.
BEVIBESHUB learned that the raids, which caught a significant number of illegal BDC operators and those thought to be clients in the two cities, would also be extended to Lagos, Onitsha, Ibadan, Port Harcourt, and other significant cities throughout the nation.
The event caused a disruption in the day's operations, according to our reporters, as many BDC operators in Abuja went underground.
Ismaila Atumeyi, a New Nigeria Peoples Party candidate for the Kogi State House of Assembly, and two others were detained by the EFCC with N326 million and $140,500 in cash.
The EFCC agents, supported by armed police officers, raided the black market FX traders' improvised booths in Zone 4, Wuse, Abuja, while they were going about their regular business, arresting many of them.
Witnesses reported seeing the men being apprehended being dragged into waiting cars while the incident slowed down nearby traffic.
The national currency has remained under pressure against the dollar following the Central Bank of Nigeria's declaration that the new naira notes will replace higher notes with effect from December 15 in order to combat counterfeiting, inflation, and insecurity.
The development was attributed to BDC operators and those who were frantically trying to turn their illegally obtained money into hard currency.
Abdulrasheed Bawa, the chairman of the EFCC, had supported the proposed redesign of the naira and warned BDC operators against currency hoarders who could try to take advantage of the opportunity to dump the money they had unlawfully stored away.
A senior person who provided information about the raids in Abuja and Kano said that the EFCC had been keeping an eye on the activities of forex dealers in those two cities and that the operations were intelligence-led.
scheduled raids
To discourage BDC operators from "killing the naira," he also revealed that the searches would be expanded to Lagos, Port Harcourt, Maiduguri, Ibadan, and other locations across the nation.
"The intelligence-driven nature of today's (Tuesday) operations contributed to their success. Since the CBN declared that the naira would be changed, we have put a number of bureau de change locations under surveillance.
Therefore, we are aware that people who possess illicit wealth would like to profit from the development to off-load their stockpile and convert it to dollars. The official revealed that the operation would be expanded to include Lagos, Port Harcourt, Maiduguri, Ibadan, Onitsha, and other locations.
Wilson Uwujaren, the EFCC spokesman, confirmed the raid on the forex dealers in Kano and Abuja but claimed to be unaware of the operation's planned execution in other locations.
"I can confirm that today, our operatives conducted a raid in Abuja's Wuse Zone 4 and detained a number of BDC operators. I am unable to confirm how many suspects have been detained thus far, he added.
But following the raid, a forex dealer in Abuja who spoke with The PUNCH blamed the EFCC for the collapse of the local currency.
"We're all hiding out. We currently trade at N857 per dollar. I informed you that the exchange rate will be N850/$ in the afternoon, but it is now not achievable. Due to the EFCC's entry into the market today, the dollar is extremely rare. Abubakar Attahiru, a forex dealer, said to one of our correspondents over the phone at 6:12 p.m. on Tuesday, "Perhaps things will change tomorrow (today)."
If the seller had a lot of dollars, another BDC employee offered to buy a dollar bill for N855.
"You get more money the more dollars you sell. If we purchase something at N850/$ from a person who has $100, we will purchase it at N852 from a person who has $10,000, he revealed.
Alhaji Aminu Gwaadabe, president of the Association of Bureau De Change Operators of Nigeria, however, declared that he completely supported the raid.
In our capacity as a group, we endorse the raid. We cannot continue to support them while observing several inconsistencies. Unlicensed individuals have taken control of the market. According to him, those who have licenses are not even permitted to work at the market.
He said that his organization was aware of the effects of the proposed redesign of the naira, which had compelled many Nigerians to transfer their local currency to dollars, but noted that this did not excuse the amount of market uncertainty.
Productivity, according to economists, is the only significant response to the depreciation of the naira and the dollarization of the Nigerian economy.
They claimed that the current state of affairs would be detrimental to the economy in general.
The decision by the CBN to redesign the naira was the main issue, according to Uche Nwogwugwu, a professor of economics at Nnamdi Azikiwe University in Awka, Anambra State.
"What you observed in the parallel market was a frightened outburst among the populace. Why are you changing your currency now, when you are experiencing inflation, declining reserves, and a recession?
"You will undoubtedly have this kind of situation if all of a sudden you start forcing people to convert their currencies," he warned.
The present devaluation of the naira at over N800 to the dollar was explained by Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, as having an impact on the nation's budget deficit.
"In this way, the deficit will be impacted. There will be a change if the value of the currency declines. Therefore, it is possible that contractors will alter their contracts. There is often a variation clause in contractual agreements, which states that the price of the contracts will change if costs or other key factors change.
"Accordingly, the price of government projects will rise. Because the depreciation of the currency influences inflation, operational costs will rise, as it does for everyone.
Projects won't be finished because the value of the naira has been further depreciated if there is no adjustment to account for the increase in inflation.
At the same time, Vincent Olusegun, a distinguished lecturer and economist at Pan Atlantic University, stressed that the Federal Government was ignoring the realities of the naira devaluation.
He declared, "In Nigeria, the exchange rate is not freely set by the market; rather, we set it ourselves. The government is therefore convinced that they can maintain the exchange rate even while the value of the naira declines daily.
Additionally, because the government has the power to fix exchange rates at N400 plus to a dollar, which is what we are doing, the country's exchange rate regime is not market-driven. Because of the drastic reduction in purchasing power, it is becoming increasingly unrealistic for the government to balance the budget.
