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Enforcing regulations for forex in Nigeria

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By Mercy Kelani

CBN has a proposed policy documentation regarding rules for forex.

Dotun Suleiman, the Chairman of brokerage firm, Parthian Partners Limited, owners of digital investment platform, i-invest, expressed his hope on the likely impact of the Central Bank of Nigeria (CBN) proposed policy documentation regarding rules of the foreign exchange market operation system in the country. The disclosure about the proposed policy documentation was made by Suleiman during an interview with journalists regarding reviews of the ongoing National Economic Summit, which was held in Abuja.

Yemi Cardoso, the current CBN governor, said that the bank will ensure the publication of robust policy documentation regarding what the regulations of the foreign exchange market operation will be in a few weeks. He disclosed this during a panel session at the summit. Suleiman expressed his optimism that the measures will generate much-needed discipline and order to a market that is generally known to be a jungle. This description is given due to the market’s lack of accountability and clear rules. He stated that the duty of the CBN Governor is to come up with the solution to the free fall.

An enforceable and clear regulation for the market is needed.

Suleiman stated that a market that is described as a jungle is a market that has no rules and accountability. Thus, he announced that in relation to such market, what the country is facing is the answer to such market. In addition, Suleiman stressed the significance of an enforceable and clear regulation for the market, stating that there is the issue of transparency in terms of exchange rates which is now targeted as a key example of issues affecting the economy.

Moreover, Suleiman explained that failure to enforce the existing rules is the major problem in Nigeria and not just the lack of rules and regulations. Also, he said that another prime issue in Nigeria is the development of a better organized regulatory environment and the enforcement of rules. He emphasized, while speaking on the issue of investments, that factors influencing the market — controllable and non-controllable — and clear understanding of the parameters are what investment decisions need most.

No one will invest their wealth in a situation that is unpredictable.

Additionally, he expressed his optimism that confidence and discipline in the system are essential tools to motivate people to invest, stating that nobody will risk their money in a system characterized by uncertainty or inconsistency. He said that investments are motivated by confidence, as a result of this, no one will invest their wealth in a situation that is unpredictable, especially when they do not know the end result. He affirmed that Nigeria needs a stronger partnership between the private and the public sectors.

He declared that the situation with the economic challenges in Nigeria, cannot be removed by the government alone. Hence, he emphasized that inspired confidence, enforcement of rules and regulations and the establishment of a conducive environment are the pertinent keys to encouraging investors. According to Suleiman, investments are all about taking and considering risks in life for returns that are in the future. Nevertheless, he said that lack of boundaries and certainty hampers investment in the country.

Improved productivity should be implemented to address debt woes.

According to Suleiman’s statement, a breach of contracts and the absence of a rule of law are the causes of the aforementioned issues that hamper investments. He also spoke on some issues like mounting debt and its effect on the Nigerian economy. He suggested that improved productivity should be implemented to address the debt woes in Nigeria, as a result, a reproductive and functioning economy would decrease the demand of borrowing. He stated that the disproportionate interest burden relative to revenue and mismanagement of borrowed funds had made Nigeria debt burdensome.

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