CBN Governor comes clean on Subsidising Dollars for Pilgrims

With the harm already done, the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has moved to douse tensions over suggestions that the apex bank provided foreign exchange at a subsidised rate for the 2016 hajj pilgrims.

Last week, there had been outrage in the country over suggestions that the central bank had subsidized the foreign exchange for Muslim Pilgrims at a time when the market had been floated.

In a statement from the bank on Tuesday, the CBN governor, Emefiele described as untrue the insinuation that foreign exchange for the pilgrims was subsidised by the Federal Government according to a report by Punch.

He stated that the CBN and intending pilgrims had already reached an agreement over purchase of dollars before the implementation of the new foreign exchange regime and that failure to honour it would amount to a breach.

According to him, pilgrims make “advance payment” of $750 early in the year to the respective state pilgrims’ boards for their personal travel allowances, after which the requests were passed by the states to the national body.

This agreement was reached in April when the market rate was N197 to a dollar, and the CBN could not ask the pilgrims to pay the difference between the old and new rates as it wasn’t sound business principle.

“What is obtainable is that every year, prior to the commencement of the pilgrimage, the commissions (both Christian and Muslim) approach the CBN to agree on the exchange rate for the personal travel allowance for that particular year, which, in this case, is between $750 and $1,000 per pilgrim,” the embattled CBN boss said.

“In this particular case, the market rate prevailed. Hence, with the commencement of the flexible exchange rate policy, market-determined rates will continue to serve as the basis for foreign exchange for pilgrimage or any form of PTA in the country.”

He defended the practice of demanding PTA for pilgrimage or tourism, before reiterating that the CBN does not renege on agreements or contracts.