Reps to probe use of dollar, other foreign currencies as legal tender in Nigeria

The House of Representatives has resolved to investigate the use of dollar and other foreign currencies in Nigeria as legal tender for domestic transactions.

The resolution was a sequel to a motion moved by Ismail Dabo (APC, Bauchi) on Tuesday during plenary.

Moving the motion, the legislator said naira continues to fall against major currencies since the unification declaration by President Bola Tinubu because of the scarcity of FX.

Mr Dabo said the inability of the country to earn sufficient FX means that naira could further slide down, thereby causing crippling inflation. He noted that oil theft has further depleted the ability of the country to earn foreign exchange.

“The president’s intention is to allow market forces to determine naira value, but the alarming exchange rate has impacted Nigeria’s economy, causing untold hardship due to increased demand for dollars and a dollar shortage.

“About 90 per cent of Nigeria’s total export earnings are from oil, which is the mainstay of the country’s economy, but changes in the price of oil around the world have a big impact on the country’s foreign exchange market. This explains why the naira has continued to depreciate,” he said.

Mr Dabo added, “A weaker and depreciating naira could increase Nigeria’s external debt servicing costs, potentially reducing government spending on critical sectors like healthcare and education.”

Contributing to the motion, Ademorin Kuye (APC, Lagos) said there is a need for the CBN to tackle the depreciation of the naira while clamping down on the domestic use of dollars.

He stated that most international airlines demand dollars for payment of airfare, while real-estate companies also demand dollars for means of payment.

“Today, if you want to fly foreign airlines, they charge you dollars. In some high-end markets, particularly the real-estate, they charge you dollars. This is criminal,” Mr Kuye said.

Also speaking in support of the motion, Bamidele Salam (PDP, Osun) blamed the new management team of the CBN for not providing a policy direction since their confirmation by the Senate.

“The management has been confirmed since but we have not heard a policy statement from him, and the market reacts to policy statements,” he said.

Olayemi Cardoso and his deputies, Emem Usoro, Muhammed Abdullahi-Dattijo, Philip Ikeazor and Bala Bello were confirmed by the Senate on 26 September.

PREMIUM TIMES had on Monday reported that In the parallel market, the naira weakened according to data posted on AbokiFX, a website that collates market rates in Lagos.

According to the data published on the website, the naira was exchanged against the dollar at N1,000 per dollar and sold at N1008 per dollar.

Resolutions

Following the debate on the motion, the House resolved to:

-Urge the Central Bank of Nigeria to implement monetary policy adjustments to stabilise the currency, address speculative activities in the forex market, and increase the withdrawal limit of the naira to reduce the pressure on dollars and other foreign currencies;

-Urge the federal government to formulate policies and structural reforms to reduce corruption and promote economic diversification within the nation’s economy; and

-Ask the federal government to promote exportation and reduce importation by enhancing foreign investors’ confidence on its fiscal and monetary policies;

READ ALSO: Zenith Bank’s half-year profit increases 162% on foreign currency revaluation gain

-Mandate its Committee on Banking Regulation to investigate the use of foreign currencies for domestic transactions; and -Mandate the Committees on Banking Regulations and National Security and Intelligence to interface with the Central Bank of Nigeria with the purpose of initiating compliance strategies.

When the motion was put to vote by the presiding officer, Deputy Speaker Ben Kalu, it was unanimously adopted.