The motion sponsor worried that further depreciation of the naira against the dollar and other foreign currencies may deter foreign investors from investing in Nigeria, which in turn, will rob unemployed youths of job opportunities.
The House of Representatives has charged President Bola Ahmed Tinubu to reduce the size of his cabinet.
This is even as it urged the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, to put necessary measures in place to stabilise the nation’s naira against foreign currencies.
This is coming on the heels of fresh appointments made by the President yesterday.
Recall that the President announced the appointment of five aides to work under the Media directorate in the office of the President.
Also, recall that President Tinubu only last week, sent an additional list of three ministerial nominees to the Senate for confirmation, bringing the number of his ministers to a record-breaking 48.
The charge follows the adoption of a motion on the “Need for the Central Bank of Nigeria to Address the Impact of the Failing Naira against the Dollar and other Currencies on the Nigerian Economy” sponsored by Rep. Ismaila Haruna Dabo (APC, Bauchi) on Wednesday during plenary.
Leading the debate, Rep. Dabo noted that in June 2023, President Bola Ahmad Tinubu through the Central Bank of Nigeria, announced changes to the country’s foreign exchange market, which was to allow market forces to determine naira value.
According to him, “The President’s intention 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. That is, foreign currencies can now be bought and sold at rates determined by the market and not by the central bank.
“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.”
Dabo also pointed out that about 90% of Nigeria’s total export earnings are from oil, which is the mainstay of the country’s economy, but changes in the price of oil around the world have a big impact on the country’s foreign exchange market, this explains why the naira has continued to depreciate;
He further noted that “Nigeria’s foreign exchange inflows are lagging despite unification in June, with high demand for foreign currency and limited access to official markets incentivizing black market purchases, the naira has lost a greater percent of its value against the dollar, falling from N778.602/$ as of September 26, September 2023, and nearly N1000/$ at the parallel market, making it the first time Nigeria has liberalised the foreign exchange market.”
The lawmaker, who frowned at the use of Dollars and other foreign currencies as legal tender for domestic transactions in Nigeria, expressed concern over the inflation and the depreciating naira thereby making imported goods more expensive, leading to higher inflation rates.
“The reduction in investment, as the value of the naira continues to lose value and depreciate against the dollar and other foreign currencies, 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”, he stated.
Speaking on the motion, Rep. Ademorin Kuye (APC, Lagos) called for restriction of business transactions in foreign currency within the country.
According to him, “Section 2 of the CBN act provides that the Central Bank shall be responsible for ensuring monetary and price stability in the country and promoting a sound financial system. The CBN must work to ensure that the country is financially stable and controls the depreciation of naira.
“In some high-end markets in the real estate in Lagos, Port Harcourt, and Abuja, they charge in dollars. In some schools, they charge in dollars too. I don’t know where this is done except in Nigeria. It is wrong and must be addressed,” he said.
Similarly, Rep. Chidi Obetta, (LP, Enugu) said “We need to encourage agriculture by all means in order to earn foreign exchange. I had used N3 million naira in exchange for a dollar rate to pay for an economic ticket to travel to the UK (United Kingdom), while those coming from there pay far less.”
On his part, Rep. Bamidele Salam regretted that most economic policies that thrive in other countries do not thrive in Nigeria.
“Most economic policies that work elsewhere are difficult to thrive here in Nigeria. Unfortunately, we don’t have measures put in place for forex policy in place. It is unfortunate that every currency right now in Africa is valued more than the naira. If you want to fly some of the foreign airlines, they charge you in foreign currency. This needs to be stopped.”
Consequently, the House also urged the Federal Government to formulate policies and structural reforms to reduce corruption and promote economic diversification within the nation’s economy.
It also urged the Central Bank of Nigeria to implement monetary policy adjustments to stabilise the currency, 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 further urged the Federal Government to promote exportation and reduce importation by enhancing foreign investors’ Confidence in its Fiscal and Monetary Policies;
It equally mandated the Committees on Banking Regulations and National Security and Intelligence to Interface with the Central Bank of Nigeria with the purpose of initiating compliance strategies.