Elite face bleak summer as currency controls look set to curtail their shopping trips

NIGERIA'S elite face a bleak summer over the course of 2016 as they have been hard hit by the recent shortage of foreign exchange which could curtail the number of shopping trips abroad they make this year.

 

Following the collapse in global oil prices to the current level of about $37 a barrel from the recent highs of about £100 a barrel that were enjoyed upon until last year, foreign exchange has become extremely scarce in Nigeria. This development has forced most of the country's commercial banks to bar their customers from using their debit cards while abroad as they no longer have the hard currency to honour such transactions.

 

Every summer, Nigeria's elite travel abroad in their thousands, mainly to Europe, North America and Dubai, where they engage in expensive shopping trips. In the UK for instance, Nigerians are the thirds highest foreign spenders, with politicians, clergymen and business moguls among the most respected shoppers on London's famous Oxford Street.

 

However, this year, it appears that things may be difficult as the inability to get foreign exchange is likely to curtail these trips. These restrictions are already biting the country’s international jet setters, who are, to their embarrassment and frustration, finding their debit cards rejected at cash point machines, restaurants and shops from London to Dubai and from Paris to New York.

 

Recently, a wealthy Nigerian who was unable to pay for huge purchases in a Dubai luxury store with his debit cards, was arrested by the police. It took one of his aides to fly from Nigeria with cash that had to be declared at the international airport to secure his release after the millionaire had spent some days in custody in Dubai.

 

Nigeria's Central Bank of Nigeria (CBN) introduced currency controls last spring as the naira came under pressure after the collapse in global oil prices. As well as banning the importation of several goods including rice and steel pipes to protect dwindling foreign exchange reserves, the CBN has also enforced spending limits on foreign currency-denominated Nigerian bank cards.

 

Uwanma Odefa, a radio talk-show host in Lagos, said that her shopping plans were thwarted during a recent trip to London.  She was forced to abandon plans to stock up on clothes and shoes at stores including Zara and TK Maxx, when her card was rejected.