Foreign Exchange Control in Nigeria and the Emefiele Approach - How Far Is Too Far?

Abstract

The future of any nation can no doubt be determined from its ability to manage its economy efficiently and optimally. Intrinsically linked to the wellness of a country’s economy is the state of its foreign exchange market usually regulated by a foreign exchange (“Forex”) regime. In times past, Nigeria has adopted very stringent approach to the regulation of the Forex market. However, the atmosphere in the Forex market became more relaxed with the enactment of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act (“Forex Act”). The foregoing notwithstanding, the Central Bank of Nigeria (“CBN”), in recent times, in addressing the depreciation cum devaluation of the Nigeria’s currency alongside the recent blow struck on the Nigerian economy by the dwindling price of crude oil , has adopted very stringent measures in regulating Forex in Nigeria. It is in this wise that this paper considers the Forex control regime in Nigeria, in the light of some circulars recently issued by the CBN. This paper also seeks to analyse the effect of the said CBN circulars and proceeds to examine those circulars in the light of existing legal framework for the Nigerian Forex market, to wit, the Forex Act, the CBN Act, the Forex Manual, the Bank and other Financial Institutions Act (“BOFIA”), amidst other relevant legislations.