Nigeria’s government has offered a reduced naira – dollar exchange rate to would-be pilgrims to Saudi Arabia this year.
The Nigerian central bank directed banks and authorized forex dealers to sell the Pilgrims Travelling allowance at a rate of N197 to a dollar instead of the interbank rate of about N319 to a dollar.
The move comes amidst the country’s worsening economic crisis.
Some 65,000 people are expected to benefit from the decision which was made last year before the currency was devalued.
‘‘It’s very good that government make concern about those who are going to hajj, helping them with some money or make the dollars available for those who are going to hajj, is very good. We like it and we appreciate it,’‘ said Ahmed, deputy Imam of 1004 Central Mosque.
Although the exchange rate is being subsidized, the Basic Travel Allowance, which enables Nigerians to buy a specified sum of foreign currency at the official rate, has been reduced from $4,000 to a maximum of $1,000.
Travel agents say the change has reduced the number of people travelling to Saudi Arabia this year.
But the exchange rate subsidy in itself has proven controversial dividing opinion in the country and has been heavily criticized on social media.
1004 Central Mosque committee member, Ayo Salami, said, ‘‘I think the question of hajj is a personal decision, it’s one of the pillars of Islam so those who can afford it are enjoined to go, right? So if you cannot afford it, then it is not compulsory that you must go, so that’s about that. But again, compared to last year I think because of the dollar exchange rate and all of that, I think the ability of people to go willingly from their own personal resources will be impacted negatively, so you potentially might see a reduction, potentially a reduction in a number of people that will go”.
Lagos based Economist, Bismarck Rewane, said, “It is said that their commitment was made in March, but to the best of my knowledge, the personal travel allowance is only available in the quarter in question. So if their commitment was made in March, that was only available in the first quarter of this year. You cannot use a pricing policy of the first quarter and apply it in the third quarter of the year. As far as I am concerned, that is not a tenable argument at all,” he said.
Its not the first time the Nigerian government has given a concessionary exchange rate to pilgrims.
Earlier this year Christian pilgrims to Jerusalem were also given a rate of N160 to a dollar.