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Reversing Nig’s Over Dependence On US Dollar

todayMarch 8, 2024 22 2

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Reversing Nig’s Over Dependence On US Dollar


The Naira is Nigeria’s legal tender duly approved by Government for official and private business transactions in the country.

The Naira by all standards is supposed to be the first and most recognized currency in Nigeria; however, the dollar that equally has the approval to be in circulation considering Nigeria’s global connection has gradually taken preeminence over the Naira. What is now common, is dollarization of the economy by individuals and even governments at all levels.

The situation is such that official and private transactions are done with the dollar.

The unfortunate scenario has not only devalued the naira but also crippled the economy and since Nigeria is more of an import dependent Nation, the current hike in exchange rate and other factors notably removal of fuel subsidy has led to an increase in prices of goods and services.

It is instructive to note that as at twenty seventh February twenty-twenty four, the Central Bank of Nigeria, CBN authorized the sale of dollars to eligible Bureau De change operators at the rate of one thousand three hundred and one naira for end-users at a margin not more than one percent above the purchase rate.

Before CBN’s latest decision, the dollar to a naira was fluctuating between one thousand five hundred naira, to one thousand nine hundred naira.

Unfortunately, even at the current high exchange rates, the dollar has remained very scarce to a level that it has continued to affect so many sectors of Nigeria’s economy.

It is not a hidden fact that Nigeria imports refined petroleum products and with the exchange rate on the high side, these products are now very expensive.

Besides, the huge amount of money used to procure these petroleum products has reflected on the prices of everything in the market, as the cost of living or doing business has soared to a level that is unimaginable.

In addition to the aforementioned situation and coupled with insecurity in parts of the Country, it has hindered direct foreign investment with some businesses relocating to other African Nations.

For experts in the financial sector, the current hardship and cost of living or doing business will continue to linger and even get worse if nothing is done urgently to reverse the situation.

The suggestion is that managers of the Economy must take concrete steps to immediately stop the importation of petroleum products usually transacted in dollars.

Government therefore has a responsibility to support and encourage private driven initiatives in the petroleum sector to pave the way for products to be refined domestically.

There is also the need for relevant agencies of government particularly the Central Bank of Nigeria, CBN to reinvent the manufacturing, productive and agricultural sectors of the economy to make essential goods and services readily available and affordable.

Addressing insecurity must remain the priority of Government as a secured environment will attract investors who will stay in the country and transact businesses using the Naira.

If properly and sincerely handled, there will be no need for importation of any kind, rather, Nigeria will be a lucrative marketing and business hub for citizens and even individuals from other countries.

No doubt, the initiative will ultimately check the high exchange rate and thereby increase foreign financial inflow that will support the Naira to regain its strength.

By Awuhe Terfa, Edited By Grace Namiji

Written by: Salihu Tejumola

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