The house of representatives has asked the Central Bank of
Nigeria (CBN) to address recurring depreciation of the naira against the
dollar.
The lower legislative chamber passed the resolution during
the plenary session on Tuesday after the adoption of a motion sponsored by
Ismaila Haruna Dabo, a lawmaker, from Bauchi state.
The house also resolved to investigate the alleged use of US
dollars and other foreign currencies as legal tenders for domestic transactions
in the country.
The naira has consistently experienced variations in value
ever since the CBN introduced the currency float policy, which now permits
market forces to determine exchange rates.
On September 12, the CBN instructed deposit money banks
(DMBs) to refrain from using profits derived from the revaluation of the naira
for dividend payments or operational financing.
A currency revaluation takes place when the value of a
currency is raised in relation to another currency within a fixed exchange rate
system.
While moving the motion, Dabo said the “alarming exchange
rate” has impacted Nigeria’s economy, causing “untold hardship” due to
increased demand for dollars and a dollar shortage.
He said about 90 percent of Nigeria’s total export earnings
are from oil, which is the mainstay of the country’s economy.
He added that 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.
“Nigeria’s foreign exchange inflows are lagging despite
unification in June, with high demand for foreign currency and limited access
to official markets incentivizing black market purchases, the naira has lost a
greater percent of its value against the dollar.”
The legislator said inflation, cost of living and the
depreciating naira make imported goods more expensive, leading to higher
inflation rates.
According to Dabo, the increased cost of living
“disproportionately” affects the most vulnerable citizens as they struggle to
afford basic necessities which are “now glaring across the country”.
He said the continued depreciation of the naira could
increase Nigeria’s external debt servicing costs, potentially reducing
government spending on critical sectors like healthcare and education.
Contributing to the debate, Ademorin Kuye, a lawmaker from
Lagos, alleged that some airlines, schools and real estate have been insisting
that Nigerians make payments in dollars.
He said such a demand violates the CBN Act which states that
only naira is an acceptable currency as a legal tender in the country.
“These are serious matters that should be looked into,” he
said.
The motion was voted for when it was put to a voice vote by
Ben Kalu, deputy speaker, who presided over the plenary.
The house asked the CBN to implement monetary policy
adjustments to “stabilise the currency and address speculative activities in
the forex market”.
The lower chamber also asked the apex bank to “increase the
withdrawal limit of the naira to reduce the pressure on dollars and other
foreign currencies”.
The lawmakers also asked the federal government to promote
exportation and reduce importation by enhancing foreign investors’ confidence
in its fiscal and monetary policies.
The house mandated the committees on banking regulations and
national security and intelligence to “interface” with the CBN to initiate
compliance strategies.
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