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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