NECA hails CBN forex code, urges effective implementation

The Nigeria Employers’ Consultative Association has applauded the Central Bank of Nigeria for introducing the Nigerian Foreign Exchange Code, describing it as a major step towards enhancing transparency, ethical conduct, and governance in the country’s foreign exchange market.

The FX Code, introduced by the apex bank, seeks to strengthen the integrity of Nigeria’s FX market, ensuring that participants, including banks, Bureau De Change operators, and corporate entities, adhere to globally accepted standards of operation.

In a statement on Wednesday, NECA’s Director-General, Mr Adewale-Smatt Oyerinde, lauded the policy as a strategic initiative that could boost investor confidence and improve economic stability if properly implemented.

“The introduction of the FX Code is a commendable step towards enhancing transparency, integrity, and professionalism in Nigeria’s foreign exchange market. This aligns with NECA’s advocacy for policies that foster a conducive business environment and economic stability,” Oyerinde stated.

He emphasised that while the FX Code is a welcome development, its success will depend largely on effective enforcement and compliance by all market participants.

“It is critical that the CBN ensures full compliance with the FX Code across all market participants, including banks, Bureau De Change operators, and corporate entities. There must also be periodic reviews and stakeholder engagements to fine-tune the policy where necessary,” he added.

NECA also called for broader reforms in the FX market, particularly in addressing the challenges associated with FOREX forwards, which have significantly impacted businesses.

Oyerinde noted that many legitimate businesses have suffered due to unresolved FX forward obligations, leading to financial strain and operational difficulties.

“We urge the CBN to take a second look at the contentious Forex forward challenge that has crippled many legitimate businesses. It is in the best interest of the economy for all stakeholders to align on issues that will promote rapid development and inclusive growth,” he stressed.

NECA reaffirmed its commitment to engaging with the CBN and other relevant stakeholders to ensure that the FX Code achieves its intended objectives.

The association urged businesses to familiarise themselves with the new guidelines and adhere strictly to the provisions of the Code.

The FX market has been a major source of concern for businesses operating in Nigeria, with volatility and liquidity shortages affecting trade and investment.

He further explained that stakeholders have long called for reforms to enhance transparency and create a stable environment for business transactions.

With the introduction of the FX Code, the CBN aims to restore confidence in the system by ensuring fair play, ethical practices, and adherence to globally recognised principles in foreign exchange operations.

While welcoming the policy, NECA stressed that the government and financial regulators must take further steps to address lingering challenges in the FX market to create a more stable and predictable operating environment for businesses.