ONSA, CBN join forces to curb speculative activities, stabilise FX market

…As FG targets $10bn to strengthen Naira

By Sodiq Adelakun

In a bid to stabilise the Nigerian foreign exchange market and curb the detrimental impact of speculative activities, the Office of the National Security Adviser (ONSA) has partnered with the Central Bank of Nigeria (CBN).

The collaboration aims to address the factors contributing to the volatility of the nation’s currency, the Naira.

The Head of Strategic Communication at ONSA, Zakari Mijinyawa released a statement on Tuesday praising the CBN’s efforts to bring stability to the forex market.

Despite these efforts, the statement highlighted that speculators, both within and outside the country, are exploiting various channels to influence the market negatively.

This speculation has been a driving force behind the Naira’s depreciation, fueling inflation and economic instability.

The CBN has previously launched a comprehensive strategy to improve liquidity in the forex market. This strategy includes the unification of FX market segments, settling outstanding FX obligations, and implementing new operational frameworks for Bureau De Change operators.

Additionally, the CBN has enforced a Net Open Position limit on commercial banks and revised the remunerable Standing Deposit Facility cap.In a parallel move to support the Naira, the Economic and Financial Crimes Commission (EFCC) has established a 7,000-member special task force.

This force, spread across the EFCC’s 14 zonal commands, is tasked with cracking down on illegal dollar trading activities.

The joint initiative between ONSA and CBN represents a significant step towards mitigating the challenges faced by the Nigerian Foreign Exchange market and is expected to contribute to the country’s economic stability.

“Recall that, to address the exchange rate volatility, the CBN initiated a comprehensive strategy to enhance liquidity in the forex market, including unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureau De Change operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.

“To reduce the pressure on the naira, the Economic and Financial Crimes Commission (EFCC) has raised a 7,000-man special task force across its 14 zonal commands to clamp down on dollar racketeers.

“Yet, recent intelligence reports have highlighted continued illicit activities within the Nigerian foreign exchange market, the ONSA and CBN are therefore embarking on this collaborative approach to tackle these infractions. This partnership will involve a coordinated effort with key law enforcement agencies, including the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service and the Nigeria Financial Intelligence Unit (NFIU).

“The primary objective of this alliance is to systematically identify, thoroughly investigate and appropriately penalise individuals and organisations involved in wrongful activities within the FX market. By leveraging the expertise of these agencies, we aim to deter malicious practices, protect investor interests, and promote sustainable economic growth.

“This joint effort underscores the commitment of the Nigerian government to improving its Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework and exiting the grey list of the Financial Action Task Force. In addition, the efforts will make progress in ensuring a stable and transparent foreign exchange market, fostering investor confidence, and advancing the nation’s economic well-being,” the statement added.

Meanwhile, the Federal Government at the inaugural Public Wealth Management Conference organised by the Ministry of Finance Incorporated (MOFI) with the theme, “Championing Nigeria’s Economic Prosperity” has revealed that it is targeting $10 billion to strengthen the Naira.

Tinubu, who was represented at the event by Vice President Kashim Shettima, highlighted a low-hanging fruit of identifying, consolidating and maximizing returns on government-owned assets worth trillions of naira.

A statement issued by the Senior Special Assistant to the President on Media and Publicity, Office of the Vice President, Stanley Nkwocha, quoted Tinubu as saying, “The Federal Government set a goal to raise at least $10 Billion (Ten Billion Dollars) in order to increase foreign exchange liquidity, a key ingredient to stabilize the Naira and grow the economy.

“At the core of this is ensuring optimal management of the assets and investments of the Federal Government towards unlocking their revenue potential. This includes our bold and achievable plan to double the GDP growth rate and significantly increase the GDP base over the next 8 years.”

The President however noted that decades of mismanagement and underutilisation have plagued the country’s assets spread across Nigeria and outside the borders, leading to revenue losses that have hindered economic growth.

He assured however that the newly restructured Ministry of Finance Incorporated, which was to act as custodian and active manager of these assets, would now take the centre stage.

The President further emphasised transparency and accountability as key principles, believing that improved corporate governance, innovative partnerships, and attracting alternative investment capital would significantly increase returns.

He noted that these improved returns would then be directed towards “crucial funding for education, healthcare, housing, power, roads and other areas vital to lifting millions out of poverty” and stimulating sustainable economic development and job creation for the youths.

Stressing that this initiative was not just about revenue generation, but about creating inclusive and sustainable growth, Tinubu said by efficiently managing public resources, the government aimed to build a more equitable society and unlock the full potential of its citizens.

He called on all stakeholders, including Ministries, Development Financial Institutions, and both public and private sector players, to partner with MOFI in optimising these strategic assets, expressing hope that the collaborative effort would unlock Nigeria’s full potential and create a brighter future for all citizens.