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Federal Government Considers Policy to Convert Foreign Currency in Domiciliary Accounts to Naira


The Nigerian Federal Government is deliberating over a potentially transformative policy that would see the conversion of foreign currency in domiciliary accounts held by individuals and businesses into the local currency, the naira. This proposal aims to bolster the naira by mandating that foreign currencies in these accounts be exchanged to naira at a rate set by the Central Bank of Nigeria (CBN). The policy is targeted at mitigating the ongoing issues of foreign exchange scarcity and the naira's depreciation, problems that are partly blamed on the hoarding of foreign currencies.


An insider from the Presidency has underscored the critical nature of the dollar shortage issue, pointing out that it predominantly affects the upper class and tends to spike at the start and end of each month. The source also noted that the practice of holding foreign currencies in personal accounts is uncommon in many countries and highlighted the importance of curbing this trend in Nigeria.


This policy idea follows prior attempts by the government to lure funds in domiciliary accounts and from Nigerians overseas into local investments across various sectors. Finance Minister and Coordinator of the Economy, Mr. Wale Edun, had earlier outlined plans to offer incentives to persuade Nigerians to repatriate funds for investment purposes within Nigeria.


Edun pointed to the significant potential sources of foreign exchange residing within domiciliary accounts and with Nigerians living abroad. He emphasized the need to foster a conducive environment that would attract these funds into the national economy.


The government's contemplation of this policy underscores its commitment to overcoming economic hurdles and leveraging available resources for the country's advancement. Should this policy be enacted, it is expected to significantly influence foreign exchange operations and support the government's efforts in stabilizing the economy and generating employment opportunities for its citizens.





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