The economists, who spoke to The PRESS in separate interviews on Sunday, raised concerns over the ramifications of the decision on the economy, stating that the decision might worsen dollar scarcity, increase inflationary pressures and fuel exchange rate shocks.

The CBN Governor, Godwin Emefiele, had last Thursday advised banks to begin plans to meet their forex needs from export proceeds as it would soon stop selling forex to them.

He pointed out that the decision was in line with the apex bank’s new commitment to boosting the country’s foreign exchange reserves through proceeds from non-oil exports.

Addressing journalist at a press briefing after the Bankers’ Committee meeting, Emefiele said, “The banks don’t have a choice and I said so this morning in the meeting, I said the era where because a bank needs $100m foreign exchange or $200m, they will bring the request to the CBN to fulfil, is coming to an end.

“Before or latest by the end of this year, (DMBs) will not come to the CBN for foreign exchange again. They should go and generate their export proceeds, fund people who want to generate non-oil export proceeds, when the proceeds come we will fund them at five per cent for you, the proceeds will earn rebates, that is how we can help you.”

But when those proceeds come, sell the proceeds to importers; don’t come to the CBN for the dollars because we will stop providing. We will stop it.”

He however noted that the banks might be able to access a portion of their forex demands from the CBN if they could provide impressive exports promotion records.

“Or maybe if they are lucky, if the bank approaches us for forex, if we see their exports records, we will give them five or 10 per cent of that request,” Emefiele noted

Speaking on the development, a renowned economist, Professor Pat Utomi, expressed displeasure over the uncertainties of the forex market as a result of the unstable policies of the CBN.

According to him, the CBN is used to impromptu policies and regulations that erode investors’ confidence in the forex market and the economy.

“Sometimes, the authorities act in panic when they see that our reserves are running low, yet, the policies that we are implementing are inevitably going to lead to those conditions anyway.

“The controls over the market typically affect the inflow of forex, but committing is better than poor regulation. If you commit to a regime of control there will be more stability, people (investors/Nigerians in Diaspora) can trust the market, they will not be afraid of uncertainties.

“The monetary authorities haven’t been consistent with their policies; they can wake up any day and change the laws.

“As such there isn’t policy clarity. The result of all these is that those who can supply forex into the markets become reluctant to supply because they don’t know how the market will be tomorrow.”

According to him, the decision of the CBN to stop the sale of forex to banks is one of those unstable policies of the CBN which will deepen forex scarcity and worsen the country’s economic conditions.

“The proposed policy change is signaling, when you make this move people will think you are panicking and those who can bring forex will hold back which will lead to increased scarcity.

“At the end, what would happen is that the economic conditions will become worse.

He added that there was an urgent need for the CBN to adopt a rigid strategy for forex market and commit to that strategy on long-term.

The former President of the Association of National Accountants of Nigeria, Dr. Sam Nzekwe, condemned the decision of the CBN, saying it would make access to forex very difficult.

He said, “If the CBN says it will not sell forex to the Deposit Money Banks, that is not correct. They have to sell to the Deposit Money Banks. The banks interface between the CBN and the customers. So, it would be wrong for the CBN to say it will not sell to the DMBs. There will be problems, accessing forex will be very difficult. If the CBN notices any infractions, they should strengthen monitoring and supervision to ensure that the correct thing is done.”

On his part, an economist and the Chief Executive Officer of the Centre for Promotion of Private Enterprises, Muda Yusuf, said the Nigerian economy risks severe shocks such as inflation and exchange rate disruptions,  if the stoppage is implemented without due consideration by the apex bank.

“The shocks of a stoppage of forex sales to banks will be difficult for the economy to bear.  There would be profound macroeconomic shocks, exchange rate shocks, inflation shocks and many more.  The economy and businesses would suffer dislocations and disruptions of immense proportions.

“The reality is that the CBN currently warehouses a huge chunk of the foreign exchange inflows into the economy.  It will therefore be very disruptive for the apex bank to terminate its forex interventions and still hold on to the inflows.

“The only scenario under which the CBN can discontinue its interventions in the forex market with minimum disruptions is to allow all inflows, including that of the NNPC to feed directly into the Investors and Exporters window at a market reflective rate.

“That way, the I & E window would have gained some depth and robustness to withstand the pressure of forex demand in the economy. That is a more sustainable model. Whichever way, it is a proposition that requires very deep thinking before implementation,” Yusuf declared.

On the other hand, a development economist, Aliyu Ilias, held the opinion that the decision was long overdue and necessary to address Nigeria’s forex challenges.

“Anything that will enable the CBN to address the forex challenge is a welcome development. I think it is even long overdue for the CBN to provide a lasting solution to the forex problem in the country,” he said.

A Professor of Economics and Public Policy at the University of Uyo, Akpan Ekpo, who also agreed with Ilias, said the CBN should not be selling forex to commercial banks, adding that the banks should be allowed to source for their forex, which in a long run would benefit the forex market.

He said, “Usually, selling forex to bank is not the best thing to do. The banks should source for their own foreign exchange. In the short term, it would affect the supply of foreign exchange but in the long term, it would be okay because it would subject the whole activity to the market. In most countries, central banks do not supply forex exchange to commercial banks.”

He added that the banks have to find the capacity to meet up as this would stabilise the forex market.