Dec 21 (Lagos) - The Minister of Finance, Kemi Adeosun, said yesterday that the ministry is in talks with the Central Bank of Nigeria (CBN) to eliminate the parallel market otherwise called black market, which has been blamed for the sinking value of the local currency.
Adeosun said having discussed with the apex bank, “the CBN has promised to do something by putting a system in place to eliminate the black market because it is damaging the economy.”
Let us hope that this is possible. The US Dollar to Naira exchange rate has hit 490 on the parallel market but officially it trades at 305.
In our opinion there is no way to abolish the parallel market unless the Federal Government begins to talk with violent groups in the Niger Delta and secure peace for oil production Companies. Then after producing that oil, Nigeria need to get lucky that crude oil prices remain at current levels or increase further so that the country can boost its foreign exchange reserves.
With the high reserve, Nigeria will be able to sell forex to manufacturing Companies that use the 41 banned items as raw material.
Unless that happens, the parallel market is not going to go away. The CBN need to supply forex to importers of the 41 items otherwise they will continue to source their forex for importation of those 41 items from the parallel market.
The diversification of the economy into agriculture is a long term dream which will take at least a decade to show given the current speed of things. So Nigeria need to concentrate what is there on the ground - crude oil - and need to engage Niger Delta groups to allow optimal oil production.
reporting for easykobo.com on Wednesday, Dec 31 2016 from Lagos, Nigeria
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