Affluent Nigerians who have $20bn sitting idle in domiciliary accounts blamed for naira's fall

WELL-off Nigerians and possibly diasporans have been identified as being partially responsible for the fall in the value of the naira as they currently have about $20bn sitting idle in domiciliary accounts that could be put to good use.

 

Following the recent collapse on oil prices to about $30 a barrel from over $100 a barrel last year, there has been a chronic scarcity of dollars in Nigeria. This in turn has put pressure on the naira, resulting in a freefall in its value as investors and those who need it for foreign purchases fight over the limited amounts available.

 

Due to the scarcity, the Central Bank of Nigeria (CBN) has struggled to supply commercial banks with the amount of dollars they require, prompting them too to limit availability to their customers. However, Joseph Nnana, the CBN's deputy governor, financial system surveillance, said the crisis could be resolved if the banks had access to the $20bn (N3.94tn) lying idle in different domiciliary accounts across the country.

 

Stating this during a meeting of the Joint Appropriation Committees of the National Assembly with government officials on the 2016 budget, Mr Nnana alleged that some privileged Nigerians were behind the consistent slide in the value of the naira by embarking on dollar speculation to the detriment of the local currency. He expressed the hope, however, that the passage of the 2016 budget would put a stop to the unrestrained drop in the value of the naira.

 

Mr Nnana said: “Distinguished chairman sir, we have $20bn lying idle in various domiciliary accounts of many customers at the various banks across the country. This is part of the reasons why the naira has continued to slide against the US dollar.

 

“The CBN will embark on aggressive liquidity mop-up to enable the naira regain confidence. Those who speculate on dollars will have their fingers burnt.”

 

Finance minister Kemi Adeosun, told the gathering that since the introduction of new accounting guidelines, the amount in the Treasury Single Account (TSA) had risen to N2.9tn. She explained that the money in the TSA was not meant to fund the budget contrary to a general impression, as it belonged to different agencies of government, which had the right to access the funds.

 

According to Ms Adeosun, all the ministries, departments and agencies of the government had their monies transferred into the TSA and should have access to them. She said that the government had commenced the training of its personnel on the operation of the TSA such that any agency of government that needed its share of the funds in the account would not find it difficult accessing it.

 

Senator Danjuma Goje, the chairman of the Joint National Assembly Committee on Appropriation, asked the executive to consider the postponement of its planned special intervention programme till next year. He argued that the implementation of N500bn (£1.76bn) intervention fund contained in 2016 budget proposals would not be feasible since there were no clear implementation strategies in place.

 

He, therefore, suggested that the money allocated to it should be added to the allocations for sectors like power, transport and health, while those responsible for its implementation should map out better strategy for it in 2017. However, the minister of budget and national planning, Udo Udoma, said the special intervention programme was a political commitment, which the President Muhammadu Buhari administration would not hesitate to fulfil.