Reps urge CBN to address the impact of Falling Naira against the dollar 

JONAS EZIEKE, Abuja

The House of Representatives on Tuesday urged the Central Bank of Nigeria (CBN) to implement monetary policy adjustments to stabilise the nation’s 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 also urged the Federal Government of Nigeria to formulate policies and structural reforms to reduce corruption and promote economic diversification within the nation’s economy.

This was a sequel to the adoption of a motion by Hon. Ismaila Haruna-Dabo from Bauchi State on the matter on the floor of the House at plenary.

The lawmaker observed that 90% of Nigeria’s total export earnings are from oil, but changes in the price of oil around the world have a big impact on the country’s foreign exchange market, which explains why the naira has continued to depreciate.

According to him, the depreciating naira makes imported goods more expensive, leading to higher inflation rates.

This increased cost of living he said disproportionately affects the most vulnerable citizens, as they struggle to afford basic necessities, which are now glaring across the country.

“Nigeria’s foreign exchange inflows are lagging despite unification in June, with high demand for foreign currency and limited access to official markets incentivising 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 lliberalised the foreign exchange market.

Hon Haruna-Dabo added 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 youths.

He stated that 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 lawmaker said the Central Bank of Nigeria (CBN) frequently uses its foreign reserves to stabilise the

naira, but this can deplete its reserves, making the country vulnerable to economic shocks.

Adopting the motion, the House presided over by Deputy Speaker Hon Benjamin Kalu called on the federal government to promote exportation and reduce importation by enhancing foreign investors’ confidence in its Fiscal and Monetary Policies.

It mandated the Committees on Banking Regulations and National Security and Intelligence to interface with the CBN with the purpose of initiating compliance strategies.

The House also mandated its Committee on Banking Regulations to investigate the use of the US Dollar and other foreign currencies as legal tender for domestic transactions in Nigeria.

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