Forex: CBN sold $1.15bn in February

The Central Bank of Nigeria sold a total of $1.15bn in February, as against $833m sold in January.

A report by the Financial Derivatives Company Limited made available to our correspondent on Friday said inflows from foreign investors and foreign exchange sales by energy firms helped keep the naira stable.

It, however, said there was increased demand pressure due to a reduction in forex inflows towards month end.

The report stated, 'At the inter-bank market, the naira recorded more volatility, depreciating by 63 kobo to trade at N157.84 per dollar on February 27 from N157.21 per dollar at the start of the month.

'On the average, the naira traded at N157.16 per dollar in this market. The exchange rate was most stable at the parallel market, trading flat at N159 per dollar throughout the month.'

On tax evasion, FDC said Nigeria lost N90bn ($550m) in revenue to the grey market of the automobile industry of the country over the last four years.

The grey market is a term that describes a situation in which goods are imported inappropriately into a market without the manufacturers' consent, thereby short-changing the authorised dealers.

The report stated, 'Just imagine what a nation can do with $550m. This is equivalent to 4.5 per cent of the total exports of Kenya or four per cent of the total exports of Ghana. This amount could fund the construction of one petroleum refinery or a modern power station with 1,000 megawatts capacity.

'On a leveraged basis of one to three, it can finance the rehabilitation of two seaports and two modern airports. With an income per capita of $1,500 and infrastructure gap of $200bn, this is not chicken feed.'

Grey market products can originate from theft, unreported sale of goods, the leaking of excess inventory into the market, illegal sales across borders and multiple sales of the same product where the manufacturer receives revenue only for the sale first reported.