EFCC Continues Raids on Currency Speculators as Naira Dips Further

In a bid to curb the plummeting value of the Nigerian naira against the US dollar, operatives from the Economic and Financial Crimes Commission (EFCC) executed raids on Bureau De Change operators across multiple cities including Abuja, Lagos, Kano, and Port Harcourt. The intensified crackdown follows the recent slide of the naira against the greenback in both official and parallel foreign exchange markets.

The Federal Government’s renewed efforts to address the currency’s depreciation stem from mounting pressure attributed to activities in the foreign exchange and digital cryptocurrency markets, with authorities pointing fingers at currency speculators for exacerbating the situation. Recent arrests of BDC operators in Abuja preceded these latest raids.

Reports indicate that EFCC operations disrupted market activities in Lagos, Port Harcourt, Kano, and Abuja, sending ripples of caution among traders. Malam Yahu, a trader in the Wuse Zone 4 market, disclosed that the fear of arrest prompted a reduction in trading activities. The naira was traded at N1,520/$ and N1,540/$ in Abuja, reflecting the impact of the raids on market dynamics.

Despite the EFCC’s focus on unregistered currency traders, registered BDC operators also found themselves affected by the crackdown. Aminu Gwadabe, President of the Association of Bureau De Change Operators, acknowledged the government’s efforts to tackle illicit practices while expressing optimism about the currency’s future appreciation.

In the parallel market, the naira closed at N1,540 per dollar, marking a 4.05% depreciation compared to the previous day’s rate of N1,480. Similarly, at the Nigerian Autonomous Foreign Exchange Market, the official exchange rate weakened to N1,520, the lowest in over six weeks.

The recent depreciation comes amidst a shortage of dollars exacerbated by foreign portfolio investors repatriating funds. Previous interventions by the Central Bank of Nigeria (CBN) aimed at stabilizing the naira saw temporary respite in April 2024. However, economists like Faith Iyoha from the Nigerian Economist Summit Group argue that fundamental liquidity policies are necessary for sustained stability.

In response to the fluctuating exchange rate, stakeholders from the Organized Private Sector have expressed concerns about the challenges it poses for businesses. Francis Meshioye, President of the Manufacturers Association of Nigeria, highlighted the need for manufacturers to continually adjust their business models to accommodate exchange rate fluctuations, potentially leading to price adjustments.

Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry, attributed the recent depreciation to a shortfall in dollar supply, warning of potential price hikes if the trend persists. Dele Kelvin Oye, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, emphasized the need for government intervention to stabilize the naira and mitigate its adverse effects on the economy.

Meanwhile, foreign portfolio outflows from the Nigerian Exchange Limited surged to N119.81 billion in the first quarter of 2024, underscoring the urgency of addressing currency volatility and attracting foreign investment.