Babarinde Decries Illegal Forex Trade, Calls for Urgent Action to Save the Naira

Bola Babarinde, a former Chairman of the All Progressives Congress (APC) in South Africa, has raised alarm over the detrimental impact of illegal foreign exchange (forex) trading on the stability and integrity of the naira. In a statement on Tuesday, Babarinde described the practice as a decades-long threat undermining Nigeria’s economic growth and called for immediate government action.
Highlighting the historical context, Babarinde recalled the strict forex controls of the 1970s during Nigeria’s military regime. Back then, he said, violations of foreign exchange regulations were met with severe consequences, including the prosecution of bank executives and individuals. These measures ensured relative stability in the naira’s value. However, he lamented that such discipline has since been abandoned, leaving the nation’s currency vulnerable.
“Today, the naira has lost much of its value, and forex trading has largely shifted from formal institutions to unregulated, informal markets,” Babarinde noted. He pointed out that foreign exchange dealers, popularly referred to as “Forex Mallams,” now operate openly across the country, from airports to street corners, eroding the naira’s credibility and bypassing formal financial systems that could support regulatory oversight.
Babarinde further criticized Nigeria’s deep reliance on foreign currencies, which he said has entrenched a culture of dollar hoarding among individuals, businesses, and even public officials. According to him, this trend often manifests during the disbursement of federal allocations to states and local governments.
“Rather than using these funds for developmental purposes, a significant portion is converted into foreign currencies and hoarded,” Babarinde stated. “These resources, meant for infrastructure, healthcare, education, and social services, remain underutilized, fueling a black-market economy and deepening poverty across the nation.”
The APC chieftain argued that the unregulated forex market exacerbates economic instability, contributing to the naira’s depreciation and widening the gap between official and parallel market exchange rates. He added that this situation perpetuates hardship for millions of Nigerians, leaving basic services underfunded and further straining an already fragile economy.
Babarinde acknowledged recent government efforts to address the crisis, such as President Bola Tinubu’s signing of Executive Order 15. The order, which focuses on disclosing, repatriating, and investing eligible foreign exchange, signals a commitment to tackling forex malpractices. However, he expressed skepticism over its effectiveness, particularly given the continued visibility of street-level forex trading.
“Nigerians remain doubtful when illegal forex dealers operate openly without accountability,” he said. “This undermines public trust and raises questions about the government’s seriousness in tackling the currency crisis.”
To reverse the trend, Babarinde proposed a comprehensive strategy centered on strengthening forex regulations, digitizing financial systems, and fostering a culture of accountability. He also emphasized the importance of expanding credit access to small and medium enterprises (SMEs), empowering entrepreneurs, and implementing financial literacy programs to promote sustainable economic participation.
Additionally, he called on key economic leaders, including Finance Minister Wale Edun and Central Bank Governor Olayemi Cardoso, to adopt a transparent and proactive approach in addressing Nigeria’s forex challenges.
“It is crucial for Nigeria’s economic leadership to prioritize solutions that not only stabilize the naira but also restore its value as a symbol of national pride,” Babarinde stated. He urged collaborative efforts across all sectors to tackle corruption, enhance economic empowerment, and discourage illicit forex practices.
Babarinde expressed optimism that with integrity, innovation, and decisive action, Nigeria could regain control of its currency and lay the foundation for long-term economic stability. “The future of the naira lies in our ability to create a robust, transparent, and inclusive financial system that benefits all Nigerians,” he concluded.