Dwindling Naira: Reps Advise CBN to Change Strategy

By Dipo Olowookere

The House of Representatives has advised the Central Bank of Nigeria (CBN) to consider changing its strategy in dealing with the dwindling Naira in the foreign exchange (FX) market.

This was part of the resolutions of the lower chamber of the parliament on Tuesday at a plenary presided over by the Deputy Speaker, Mr Benjamin Kalu.

One of the lawmakers, Mr Ismaila Haruna Dabo, had moved a motion on the need for the CBN to address the impact of the failing naira against the dollar and other currencies on the Nigerian economy.

In his contribution, Mr Afolabi Moruf expressed worry over the rate at which the value of the domestic currency was weakening against the US Dollar in the forex market, particularly in the parallel market window, calling for an urgent change of approach.

He said it would be wrong to do the same thing and expect a different result, charging the monetary authorities to have a “holistic change of approach to dealing with” the issue and “ensure an improvement in the production and manufacturing sector instead of thinking of the CBN just to adjust current economic policies which may provide only temporary solutions, if at all.”

In his contribution, Mr Ademorin Kuye said part of the problem was substituting the Naira with the Dollar as a legal tender in Nigeria, calling for halting the practice of charging Nigerians for goods and services in Dollars.

The mover of the motion, Mr Dabo, said he brought the issue to the attention of his colleagues because he was worried about the reduction in investment in the country because of the weak local currency, which he said deters foreign investors 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.

According to him, a weaker and depreciating Naira could increase Nigeria’s external debt servicing costs, potentially reducing government spending on critical sectors like healthcare and education.

After the debate on the floor of the green chamber of the National Assembly, the House urged the CBN to implement monetary policy adjustments to stabilise the Naira, 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.

The House of Reps also advised the federal government to formulate policies and structural reforms to reduce corruption and promote economic diversification within the nation’s economy, charging the government to promote exportation and reduce importation by enhancing foreign investors’ confidence in its fiscal and monetary policies.

While tasking its Committees on Banking Regulations and National Security and Intelligence to interface with the CBN on initiating compliance strategies, it called for investigating the use of US Dollars and other foreign currencies as legal tender for domestic transactions in Nigeria.

Business Post reports that the Naira further depreciated against the Dollar in the black market on Thursday by N15 to sell at N1,045 compared with the previous day’s rate of N1,030/$1.