Non-remittance of dollars to foreign reserves by the Nigeria National Petroleum Corporation (NNPC) is responsible for naira’s free fall in the official and parallel markets, the Central Bank of Nigeria (CBN) has said.
As at the close of work yesterday, the naira traded for N700/$1 at the parallel market and N415.96/$1 at the official market.
The CBN explanation was given in report that was released yesterday.
NNPC and its subsidiaries are the sole managers of crude oil which accounts for more than 80 per cent of Nigeria’s Foreign Exchange (forex) earnings.
On Tuesday, an abridged communique of the Federation Account Allocation Committee (FAAC) showed that the Excess Crude Account (ECA) shrank to $376,655.09 from $35.377 million in May.
The ECA is supposed to be a savings buffer meant to steady the government’s revenue and serve as a bailout for the economy in dire times.
The abridged version of the FAAC communique was released at the end of the monthly FAAC meeting in Abuja by the Director in charge of Information in the Office of the Accountant-General of the Federation (OAGF), Henshaw Ogubike.
In the CBN report titled: “The forex question in Nigeria: Fact sheet”, the apex bank disclosed that “domestically, there has been zero dollar remittance to the country’s foreign reserve by the NNPC, insisting that the CBN does not print dollars.
The report states: “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.”
According to the apex bank, Nigeria earns foreign exchange from four sources – proceeds from oil exports; proceeds from non-oil exports; diaspora remittances, and Foreign Direct/Portfolio Investments (capital flows).
The bank noted that the past six years have been characterised by two recessions triggered by a slowdown in the global economy as well as the effects of COVID-19.
These, it said, were further accentuated by sharp declines in the prices of crude oil, the major source of Nigeria’s foreign exchange.