A critical analysis of the effects of the Central Bank of Nigeria foreign exchange policy on financial inclusion, anti-money laundering measures and fundamental rights
| Published date | 02 October 2017 |
| DOI | https://doi.org/10.1108/JMLC-05-2016-0020 |
| Pages | 417-427 |
| Date | 02 October 2017 |
| Author | Ehi Eric Esoimeme |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
A critical analysis of the effects of
the Central Bank of Nigeria
foreign exchange policy on
financial inclusion, anti-money
laundering measures and
fundamental rights
Ehi Eric Esoimeme
DSC Publications Ltd, Lagos, Nigeria
Abstract
Purpose –Following the drop in crude oil prices from a peak of US$114 per barrel in July 2014 to as
low as US$33 per barrel in January 2016, the country’sreserveshavesuffered gre at pressure from
speculativeattacks,roundtrippingandfrontloadingactivitiesbyactorsintheforeignexchange(forex)
market. The fall in oil prices also implied that the Central Bank of Nigeria’s (CBN) monthly foreign
earnings had fallen from as high as US$3.2bn to current levels of as low as US$1bn. The net effect of
these combined forces unfortunately is the depletion of the nation’s forex reserves. As of June 2014, the
stock of forex reserves stood at about US$37.3bn but has declined to around US$28.0bn as of today. To
avoid further depletion of reserves, the CBN adopted a number of policies including the prioritisation of
the most critical needs for forex. This paper aims to critically analyse the effects of these policies on
financial inclusion, anti-money laundering (AML) measures and human rights. Its aim is also to
determine whether CBN’s Forex Policy does strike a fair balance between financial stability, inclusion,
AML measures and human rights.
Design/methodology/approach –This paper relies mainlyon primary and secondary data drawn from
the public domain.It also relies on documentary research.
Findings –This paper determinedthat the CBN forex policy does not strike a fair balance betweenfinancial
stability,inclusion, AML measures and human rights.
Research limitations/implications –This paper focuses on the effect of the most recent CBN Forex
Policies on financial inclusion, AML measures and human rights. It does not address the older policies.
Also, it does not address other vulnerable groups like low-income households. Its focus is on the under-
served group.
Originality/value –While many have written papers on CBN’s forex policies, none of those papers
critically analysed the effects of these policies on financial inclusion, AML and fundamental rights.
The Lagos Chamber of Commerce and Industry, for example, analysed the impact of these polices on
the financial services sector; the manufacturing sector; food and household products; tyre and
rubber industry; pharmaceutical sector, oil and gas sector; free trade zone sector; furniture
manufacturers; and foam manufacturers. It made no mention of inclusion, money laundering and
fundamental rights. Also, Vincent Haruna analysed the effect of these policies on Nigerians,
particularly those engaged in international trade, and those who have children studying abroad. He
neither specifically addressed financial inclusion nor did he make any mention of human rights and
money laundering.
Keywords Money laundering, CBN Forex policy, Financial inclusion, Fundamental rights
Paper type Research paper
Foreign
exchange
policy
417
Journalof Money Laundering
Control
Vol.20 No. 4, 2017
pp. 417-427
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-05-2016-0020
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