Ex-bank chief accuses CBN of forex ‘favoritism’

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A former chief executive officer of Stanbic IBTC Bank PLC, Atedo Peterside, has accused the Central Bank of Nigeria of discriminatory exchange rates that shows bias.

Peterside Atedo, Former Stanbic IBTC bank Chairman
Peterside Atedo, Former Stanbic IBTC bank Chairman

“When three people are competing in the same industry and they asses forex at different rates, effectively the winner is no longer chosen by efficiency, its chosen by who is closest to central bank,” Mr. Peterside said Friday.

He made the remarks as the keynote speaker at the 2017 First Quarterly Dinner of Kings College Old Boys’ Association, Abuja branch, while presenting a paper entitled “Evolving Economy, Good Governance and Repositioning Nigeria’’.

Mr. Peterside described the Nigerian government’s Economic Recovery and Growth Plan (ERGP) as a timid plan “that may leave us with negative GDP per capita growth throughout the plan period unless something gives”.

The recovery plan has three broad strategic objectives: restoring growth of the economy, investing in the Nigerian people, and building a globally competitive economy.

It targets the growth of Nigeria’s gross domestic product, GDP, by 2.19 percent in 2017 and 7.0 percent by the end 2020.

But according to the former bank chief, instead of being distracted by the “timid plan”, Nigerians should focus on 11 major impediments to speedy economic recovery.

The first on the list was the issue of foreign exchange rate, he said.

“It is mind-boggling and very difficult to understand why Nigeria, in 2017, would be embracing multiple exchange rates which have been rejected globally as a bad idea that was only ever embraced by intellectually and/or morally bankrupt persons. There is no known economic theory on earth that favors multiple exchange rate as viable medium and long-term economic policy prescription.

“It means someone can legally give the man from FGC dollar at 180 and give someone else at a different rate. The point I’m making is that no one gives anybody that kind of laxity,” Mr. Peterside said.

Mr. Peterside urged the CBN to speedily work towards dismantling the “embarrassing concoction of multiple exchange rates, bank quotas and special windows”.

He however hailed the bank for making forex available through the banks at N360/$1 to the hundreds of thousands of individuals who he said had been “needlessly” starved before.

Mr. Peterside said that some other impediments to economic recovery include reaching some understanding with Niger Delta militants.

He said significant progress has been achieved here following the mature and level-headed diplomatic initiatives led by the vice-president in recent months.

He however noted that the government should remember that appeasing militants is necessary in the short term, but the long-term solution is to embrace the constitutional amendment which he recommended a one per cent royalty payment to immediate host communities on all mining and mineral producing activity.

Other impediments are ineffective deregulation of the downstream petroleum sector, need for political restructuring, bloated civil service, infrastructural deficit, dysfunctional legal system, strategic asset sales, restoring business confidence and beefing up the regulatory agencies.

On Buhari’s anti-corruption crusade, he said every success recorded was marred by the insistence on over-zealous security chiefs to launch a personal vendetta on the opposition.

“Little wonder that every crook in the country is caught up in a stampede to join the ruling party?” he asked.

“Even more disturbing is FG’s mean-spirited dangerous penchant for disobeying court orders. The assault on the rule of law is led by the FG itself and now a few Governors are copying them. The end-result of all this may well be anarchy.”


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