In a significant crackdown, operatives of the Economic and Financial Crimes Commission (EFCC) conducted extensive raids on Bureau De Change (BDC) operators across major Nigerian cities, including Abuja, Lagos, Kano, and Port Harcourt. This operation comes in response to the naira’s continued depreciation against the US dollar in both official and parallel markets.
The EFCC’s actions are part of the Federal Government’s renewed efforts to stabilize the naira, which has been under increasing pressure from currency speculators in both forex markets and the cryptocurrency space. The government has accused these traders of exacerbating the naira’s decline by speculating against it.
Last week, several BDC operators were apprehended in Abuja on similar charges. Despite resistance from some traders, the EFCC has persisted with its raids, particularly targeting unauthorized currency dealers in the Federal Capital Territory.
Traders confirmed that these sting operations significantly disrupted market activities. Malam Yahu, a trader at the popular Wuse Zone 4 market in Abuja, reported that the raids in Lagos, Port Harcourt, and Kano caused widespread caution among traders in Abuja, who feared similar actions.
“The naira is now N1,540, and we are buying at N1,520,” Yahu explained. “The EFCC operations in other cities have made traders in Abuja very cautious. Nobody wants to be arrested, which has contributed to the high rates.”
Aminu Gwadabe, President of the Association of Bureau De Change Operators, confirmed the EFCC’s focus on street traders, though some registered BDC operators were also affected. Gwadabe expressed hope that these measures would eventually lead to a stronger naira.
The parallel market saw the naira close at N1,540 per dollar, a 4.05% drop from the N1,480 recorded on Monday. This decline is attributed to a dollar shortage caused by the repatriation of funds by foreign portfolio investors.
Similarly, the Nigerian Autonomous Foreign Exchange Market reported a 3.04% depreciation, with the dollar quoted at N1,520 on Tuesday, down from N1,478 the previous day. This marks the lowest rate in over six weeks and the first time the official rate has surpassed N1,500/$1 since March 2024. The intra-day high reached N1,568/$1, reflecting further weakness.
The supply of dollars also fell by 40.8%, dropping to $128.76 million from $217.64 million on Monday. Despite a temporary appreciation of the naira from mid-March to mid-April, recent declines have been steep. The Central Bank of Nigeria (CBN) had previously intervened to curb speculation, which helped stabilize the currency temporarily.
Faith Iyoha, an economist with the Nigerian Economist Summit Group, noted that the naira’s volatility stems from a lack of fundamental FX liquidity policies. She emphasized the need for increased FX liquidity through exports and foreign capital inflow to achieve long-term stability.
Members of the Organized Private Sector also voiced their concerns. Francis Meshioye, President of the Manufacturers Association of Nigeria, highlighted the challenges posed by the fluctuating exchange rate, which complicates business planning and pricing strategies.
Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry, attributed the naira’s depreciation to a shortfall in dollar supply and warned that ongoing fluctuations could lead to further price hikes.
Dele Kelvin Oye, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, stressed the broader economic impact of the naira’s decline, including increased import costs and inflation. He called for government action to stabilize the currency, potentially through pegging and defending the naira.
As the naira continues to face significant challenges, the EFCC’s efforts to clamp down on currency speculation highlight the ongoing struggle to stabilize Nigeria’s economy amid a volatile forex market.
