Reps to investigate usage of foreign currencies for domestic transactions

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The House of Representatives on Tuesday resolved to investigate the use of the United States dollar and other foreign currencies for domestic transactions in Nigeria.

This followed the adoption of a motion titled ‘Need for the Central Bank of Nigeria to Address the Impact of the Failing Naira against the Dollar and other Currencies on the Nigerian Economy’ moved by Hon. Ismaila Haruna Dabo at the plenary season presided over by the Deputy Speaker, Hon Benjamin Kalu

The House also called on the Central Bank of Nigeria (CBN) to address the impact of the failing Naira against the Dollar and other currencies.

It mandated the Committee on Banking Regulations to investigate the use of the United States Dollar and other foreign currencies as legal tender for domestic transactions in Nigeria.

The House in addition urged the CBN 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.

It also urged the Federal Government to formulate policies and structural reforms to reduce corruption and promote economic diversification within the nation’s economy.

The House further urged the Federal Government to promote exportation and reduce importation by enhancing foreign investors’ confidence in its Fiscal and Monetary Policies.

It mandated the Committees on Banking Regulations and National Security and Intelligence to interface with the CBN with the purpose of initiating compliance strategies.

Dabo said that “the House Notes that in June 2023, the President of the Federal Republic of Nigeria, Bola Ahmad Tinubu through the Central Bank of Nigeria announced changes to the country’s foreign exchange market.”

This, it said, was so that the foreign currencies can now be bought and sold at rates determined by the market and not by the CBN.

According to him, “The House is worried about inflation and the cost of living, depreciating naira makes imported goods more expensive, leading to higher inflation rates. This increased cost of living disproportionately affects the most vulnerable citizens, as they struggle to afford basic necessities, which are now glaring across the country.

“The House is also worried about the reduction in investment, as the value of the naira continues to lose value and depreciates against the dollar and other foreign currencies, foreign investors may be deterred from investing in Nigeria, fearing potential currency losses, which is capable of stunting economic growth and hindering the creation of new job opportunities for unemployed Nigerian youth.

“The House is aware that a weaker and depreciating Naira could increase Nigeria’s external debt servicing costs, potentially reducing government spending on critical sectors like healthcare and education.

“The House is also aware that the Central Bank of Nigeria (CBN) frequently uses its foreign reserves to stabilise the naira, but this can deplete its reserves, making the country vulnerable to economic shocks.

“The House is cognizant that addressing Nigeria’s financial challenges requires collective responsibility from all stakeholders, including parliament, which has been the voice of the common man.”

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