The House of Representatives has urged the Central Bank of Nigeria, CBN, to implement monetary policy adjustments to stabilise the currency.
The call is the sequel to a unanimous adoption of a motion by Rep. Ismaila Dabo (APC-Bauchi state) at plenary on Tuesday in Abuja.
Morning the motion, Mr Dabo recalled that in June 2023, President Bola Tinubu through the CBN, announced changes to the country’s foreign exchange market.
He explained that changes meant that foreign currencies would be bought and sold at rates determined by the market and not by the central bank.
According to him, the intention of the change is to allow market forces to determine naira value, but the alarming exchange rate has impacted Nigeria’s economy, causing untold hardship due to increased demand for dollars and a dollar shortage.
The rep said that about 90 per cent of Nigeria’s total export earnings are from oil, which is the mainstay of the country’s economy.
He said that the changes in the price of oil around the world have a big impact on the country’s foreign exchange market, saying that this explains why the Naira has continued to depreciate.
Mr Dabo said that Nigeria’s foreign exchange inflows are lagging in spite of the unification in June.
He said it had resulted to high demand for foreign currency and limited access to official markets incentivising black market purchases.
“As a result, the Naira has lost a greater percent of its value against the dollar, falling from N778.602 per dollar as of September 26, 2023, and nearly N1000 per dollar at the parallel market, making it the first time Nigeria has lliberalised the foreign exchange market.
“The inflation and the cost of living, depreciating Naira makes imported goods more expensive, leading to higher inflation rates and it is worrisome.
“This increased cost of living disproportionately affects the most vulnerable citizens, as they struggle to afford basic necessities, which are now glaring across the country,” he said.
The lawmaker expressed worry about the reduction in investment, as the Naira continues to lose value and depreciates against the dollar and other foreign currencies.
He said that foreign investors may be deterred 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.
“A weaker and depreciating naira could increase Nigeria’s external debt servicing costs, potentially reducing government spending on critical sectors like healthcare and education.
“The CBN frequently uses its foreign reserves to stabilise the naira, but this can deplete its reserves, making the country vulnerable to economic shocks.
“Addressing Nigeria’s financial challenges requires collective responsibility from all stakeholders, including parliament, which has been the voice of the common man,” he said.
The house urged the CBN to 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 legislators also urge the Federal Government to formulate policies and structural reforms to reduce corruption and promote economic diversification within the nation’s economy.
They urged the Federal Government to promote exportation and reduce importation by enhancing foreign investors’ confidence in its fiscal and monetary policies.
The Deputy Speaker of the house, Benjamin Kalu mandated the Committees on Banking Regulations and National Security and Intelligence to interface with the apex bank initiate compliance strategies.
He also mandated the Committee on Banking Regulation to investigate the use of dollars and other foreign currencies as legal tender for domestic transactions in Nigeria.
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