₦airaland Forum

A country’s currency matters; therefore, the naira should matter. Yet, the naira, like the currency of many import-dependent economies, has one denominator: weakened currencies, caused mainly by unbridled demand for dollars and other hard currencies for imports.

The Nigerian currency has depreciated sharply since President Bola Tinubu floated it in June 2023. Its weakened state strongly contributes to high commodity prices and soaring inflation.

In the one year to June 2024, the naira depreciated by 216.64 per cent against the dollar; it exchanged at N471 per dollar in June 2023 to N1,482.72 in June 2024. On Monday, the rate was N1,599.55 to $1.

In most countries, local currencies are used as the primary medium of exchange, allowing for the smooth and efficient flow of goods, services, and capital within the economy.

However, in Nigeria, many transactions are done locally in dollars, pushing the local currency to the back seat and further piling pressure on the naira. There have been instances of Nigeria-based schools demanding dollars for payment of fees, and estate agents demanding dollars for rent.

Many politically exposed persons keep their loot in dollars. Indeed, the naira value depreciates more during electioneering.

However, the law is solidly against transactions made in any currency other than the naira in Nigeria.

Section 20 of the CBN Act 2007 states that the currency notes issued by the bank are legal tender in Nigeria at their face value for the payment of any amount.

It says a person who refuses to accept the naira as a means of payment is guilty of an offence and liable to a fine or imprisonment.

So, demanding dollar payments for goods and services offered locally is punishable under the law.

Lately, the Economic and Financial Crimes Commission has been using the provisions of the CBN Act to go after some people who are ignoring the law and offering goods and services priced in dollars rather than the naira.

For instance, a Lagos-based jeweller was arrested, arraigned, and convicted for refusing to accept naira payment for goods following the EFCC’s sting operation. The vendor had rejected the naira for a diamond watch, insisting on $5,700. He was sentenced to a four-year jail term with an option of a N650,000 fine.

However, the conviction of a soft target is not a strong deterrent to those who continue to disrespect and disregard the local currency by insisting on dollar payments.

The EFCC should go after bigger players who openly demand dollars for local transactions.

First, the government should restore confidence in the naira as a store of value. The naira depreciation has only led to a marginal drop in local petrol prices, even though crude oil prices have dropped significantly in the international market.

So, on the government side, all hands must be on deck to strengthen the naira, while the citizens must respect the naira and make local transactions in the local currency.

The government should crack down on corruption, especially the one that happens among officials, which pressures the naira. In many instances, naira is changed to dollars not to import goods, but to be laundered abroad.

Thus, beyond arresting and prosecuting a jeweller, the EFCC and the ICPC must work hard to fight corruption by the political elite. Economic reforms could hardly succeed without a strong fight against graft.

Efforts must be intensified to diversify the economy, strengthen the country’s manufacturing base, attract more foreign investments, and broaden the country’s export base by reducing the dependence on oil revenue.

There must be strict enforcement of the use of the naira for local transactions.

Punch Editorial Board

ogododo:
https://punchng.com/dollar-for-local-transactions/

ogododo:
https://punchng.com/dollar-for-local-transactions/

malali:
The truth is we are closer to a dollarized economy than naira.

Even those currently charging naira are using dollar to guide.

PlasmaTV:
O ga
The EFCC should first go after politicians, ergo Yahaya bello, who paid school fees in millions of dollars for his children. They should prosecute politicians who have stolen more dollars than we can ever think of.

So now, people spending in dollars is why the Naira is weak? Bunch of billy 🐐🐐🐐. At first, Bayo Onanuga and his merry band of yediots blamed crypto/Binance for the weak currency. Now, there's nothing else to blame than people who own dollars. 🤡

This government enjoys chasing shadows and leaving substance. I spit on them.

Validated:
Blame PBAT

mmsen:
We live in a globalized economy in which the essentials are priced in dollars.

jiz:
Don't take APC and EFCC too serious

mmsen:
We live in a globalized economy in which the essentials are priced in dollars.

Validated:
Naira is gone. People now spray $ in parties.
Next election, people will not accept Naira for vote selling.
Solution, ban Dollar use.

Validated:
Tinubu, a Deloitte mentored accountant. Trained in Chicago with reputation for building the single largest economy in Africa, Lagos.

Unfortunately, the opposition led by Peter Obi did not allow him to show his economic sagacity. His economic prowess would require years to be fruitful. Afterall, how many people harvest cocoa until after 12 years?

Truth be told, Tinubu should be given 2nd and 3rd term to complete his reforms of making Nigeria great again ... Wait, did I say "great again"?

DuBLINGreenb:
Blaming everybody else but yourself that’s the Nigerian way.

Who in his right mind will save 10,000,000 or more in naira when he has access to Dollars?

Your naira losses 30% of its value on average every year due to inflation. Some years 35-40%
Whereas your banks only give 5% interest yearly. So do the maths.

Whereas these foreign currencies lose 1-3% yearly due to inflation if e too bad 5%

So do the maths.

Someone I knew was saving in naira, he kept telling me “Oboy you no go build your naira account”? 😆 I looked at him like he was dumb.
I said why? He said incase of anything in Naija or any emergency he can use his naira or send his people money or when he goes back to Nigerian bla bla bla

I laughed this happened in 2023 when it was $1 Canadian = 470 naira

As I type this today it is $1 = 1,150 naira
The money in his bank account has lost 144.68% of its value in just 2 years.

This means
If ₦470 used to buy $1 worth of goods, now you need ₦1,150 for the same $1:
That means your ₦470 can now only buy about 41% of what it used to.
In other words, the naira buys less, so imported goods, fuel, electronics, and food (especially items priced in dollars) become much more expensive.

If your salary or savings hasn’t increased, you can now afford far less than before.
Example: If someone earned ₦100,000/month when $1 = ₦470, they effectively earned $212.
At ₦1,150 to $1, that same ₦100,000 is now worth only $87.