Nigeria objects to IMF advice on forex transaction laws
A major African economy has announced it will reject the advice of the International Monetary Fund (IMF) regarding its policy on foreign exchange.
Nigeria was told by the IMF that it should change its policy of restricting foreign exchange transactions placed by foreign investors on certain goods when they import them into the country.
The IMF claimed that this made it harder for foreign investment to come in.
However, an official from the Central Bank of Nigeria said that he wanted to encourage people to make their goods in Nigeria rather than rely on them being imported from elsewhere.
In a speech to the International Monetary Fund and World Bank meetings taking place at the moment in Washington DC, Governor Godwin Emefiele pointed out that the Nigerian market contained over 200 million people.
“If you are a foreign direct investor interested in doing business in Nigeria, I will say instead of you facilitating the import of these items into Nigeria, we want you to come and produce it in Nigeria”, he said.
“Nigeria is a market of over 200 million people. So, you do not have a choice than to come, bring your investment plans and equipment and produce that item in Nigeria so that Nigerians can consume it”, he added.
He also emphasised the fact that this would not remove the opportunity for profit making.
“Then, you will make your profit and take your dividend out of the country”, he explained.
“So, I disagree with that position that foreign exchange restriction is hurting investment inflow into Nigeria.”
African countries often make certain types of forex transactions illegal, either to combat criminal fraud directly – or, as in this case, to ensure that fairness in foreign exchange transactions can be achieved in a highly globalised economy.
Malawi Reserve Bank hits out at alleged corporate fraud
In further African forex news, the deputy governor of the Reserve Bank of Malawi has announced that a group of international conglomerates are being pursued over alleged foreign exchange-related fraud.
According to the deputy governor, Dr. Grant Kabango, some firms have under-emphasised the quantity of agricultural products they have produced.
Instead of declaring it properly, they have reported it out of the country – meaning that Malawi has missed out on a large amount of foreign currency which buyers from abroad may have otherwise spent and brought into the southeast African nation.
It is understood that around 1bn Malawian kwacha have been lost as a result of this alleged fraud.
Last year, the equivalent of almost $1bn was lost due to this sort of externalisation.
“By extension, the rest of the funds are being retained outside the country, this is defrauding the country of its export proceeds”, Kabango is quoted as saying in the local press.
The case now appears to be ready to proceed.
The bank says it has signed a memorandum of understanding with a wide range of other authorities in the country.