A critical analysis of the eﬀects of
the Central Bank of Nigeria
foreign exchange policy on
ﬁnancial inclusion, anti-money
laundering measures and
Ehi Eric Esoimeme
DSC Publications Ltd, Lagos, Nigeria
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
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-
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
Keywords Money laundering, CBN Forex policy, Financial inclusion, Fundamental rights
Paper type Research paper
Journalof Money Laundering
Vol.20 No. 4, 2017
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