Friday, February 12, 2016

Nigeria may stop providing forex for schooling, medical bills overseas

This was as it noted that medical bills and school fees constituted as much as 15 percent of Nigeria's forex demand.

By this directive, Nigerians who may need to go outside the country for education goal or health care will have to get the foreign currency from the parallel market to carry out their engagements.

The keynote speakers took turns to share their insights on the topic focusing on the merits and demerits of devaluating Naira.

On his part, the Managing Director of Access Bank, Mr. Herbert Nwigwe, said banks had made a decision to channel such forex to the real sector because those demands tend to crowd out demands to import raw materials and to support industries.

Addressing journalists shortly after the committee's meeting in Abuja, yesterday, the director, Banking Supervision, Central Bank of Nigeria (CBN), Mrs Tokunbo Martins, said that the committee extensively deliberated on the need for the 170 million Nigerians to have some form of financial inclusion and expressed delight that there has been substantial improvement in that regard. "It is pain we may need to go through today, so that there will be long term development in the country", she said.

The problem with that is that it tends to crowd out the critical foreign exchange that should be used in the real sector for manufacturing to support industries to encourage employment.

She said: "You know it is something that affects all of us and I think that the watchword is belt-tightening".

"We need to focus on the real sector".

"The pressure on foreign exchange now from school fees overseas is significant".

"The pressure on medical is significant".

The idea which is still on the drawing board he said "is not that you can't do it, the point is that you cannot access it from the CBN's limited resources; we did not reach any formal conclusion on it, but that is the general direction that we are headed". Martins also disclosed that the banking sector had recorded tremendous progress in its financial inclusion drive adding that currently, 66 per cent of Nigerians representing 57 million people now have access to financial services.

"So our discussion around that is how we could prevent and reduce the crowding out of the real sector where there is increased demand on the invisibles and it is something the central bank and the bankers committee is looking at".

The Managing Director Diamond Bank Plc, Mr Uzoma Dozie, said the banking sector was now working on how to increase the level of access to credit.

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