The Central Bank of Nigeria (CBN), has blamed the Nigerian National Petroleum Company Limited (NNPC) for the depreciation of the Naira against the United States Dollar (USD).
In a statement cited by BizWatch Nigeria on Friday, July 29, 2022, CBN explained that NNPC and its subsidiaries have failed to remit the USD to Nigeria’s foreign reserves. Hence, the foreign exchange (FX) market is suffering from a shortage of the currency.
According to the financial sector regulator, the NNPC remittance from crude oil accounts for more than 80% of forex earnings.
“Domestically, there has been zero dollar remittance to the country’s foreign reserve by the NNPC.
“As noted by the CBN Governor, Godwin Emefiele, monetary policy alone cannot bear all the burden of the expected adjustments needed to manage these difficulties. It’s our collective duty as Nigerians to shore up the value of the naira,” the regulator explained.
In the statement titled “The forex question in Nigeria: Fact sheet”, CBN also cited the two recessions driven by global economic slowdown and the COVID-19 pandemic in the last six years, which it explained have affected the country’s sources of foreign currencies; oil exports, non-oil exports; diaspora remittances, as well as the Foreign Direct/Portfolio Investments inflow recorded by the country.
“Considering Nigeria’s heavy dependence on oil exports for foreign exchange earnings and government revenue, the impact of the oil market crash severely affected the government’s naira revenue and other macroeconomic aggregates including economic growth.
“Hence, the rate of exchange between the naira and other currencies has widened over the past few years,” it added.
Meanwhile, as of Thursday, July 28, Naira exchanged for N718 against the dollar.