CBN Defends Forex Rate Subsidy For Muslim Pilgrims


A nationwide outcry has trailed the foreign exchange waiver of N197 to a dollar granted to prospective Muslim pilgrims as against the existing flexible Forex rate of N400 to a dollar in the open market.

However, the Central Bank of Nigeria, CBN, has defended its decision to grant a concessionary Forex rate for the 2016 pilgrimage, saying there was no preferential exchange rate of any sort to intending pilgrims.

This was noted in a statement in Abuja on Tuesday by the CBN acting Director of Communications, Isaac Okorafor. In the statement, the CBN Governor Godwin Emefiele explained that laid down procedure was followed in arriving at the exchange rate for the pilgrims.

He said:

“What is obtainable is that every year, prior to the commencement of the pilgrimage, the commission, both Christian and Muslims, approach the CBN to agree on the exchange rate for the personal travel allowance (PTA) for that particular year.

“In this case it’s between 750 dollars and 1,000 dollars per pilgrim”. 

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According to the CBN governor, the agreement was applicable to both intending Christian and Muslim pilgrims.

Nation's Economy Forex Rate
CBN Defends Forex Rate Subsidy For Muslim Pilgrims

Revealing that the agreement to sell foreign exchange to the pilgrims at the rate of N197 to the dollar was consummated in April this year at the prevailing rate then, Emefiele explained that after the agreement, the pilgrims would go ahead to make commitment by way of advanced payment.

Hear him:

“Pilgrims made what is called advance payment for their personal travel allowance, in this case $750.

“They make those advance payments to the state pilgrims board, and then the state passes it to the national body, who in this case has reached an agreement with the central bank about the appropriate rate that would be used.

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“For 2015, it is important for me to go back. In 2015, when the market rate was 197, the pilgrims commission, Christians and Muslims, actually came to the central bank and agreed at N160 to the dollar, even when the market was 197. That was an agreement and a contract reached.” He added.

Following the above explanation, the CBN head said it would not be in line with business ethics to direct the pilgrims to pay the difference in the old and new forex rate since the existing agreement meant that the market rate as at the time of the deal was sealed must prevail.

Mr. Emefiele, however, made it clear that with the commencement of the flexible exchange rate policy, market determined rates would continue to serve as the bases for foreign exchange for pilgrimage or any form of PTA in the country.

He therefore appealed to members of the public to exercise restraint in their comments in order not to cause unnecessary and avoidable disaffection among the public.