Delta North’s Senator, Ned Nwoko, has said that Nigeria’s economic reforms will fail so long as the government allows multiple currencies to exist, which weaken the naira’s value.
The state of our economy is dire,’ Nwoko lamented on Channels Television’s Politics Today. ‘The dominance of foreign currencies such as the dollar, pound, euro, and renminbi has led to the devaluation of our naira, making it a matter of grave concern.’
Nigeria, according to Nwoko, stands alone in its policy of allowing its citizens to use foreign currencies, such as the dollar, pounds, and euros, alongside the local currency. ‘This has resulted in the naira losing its value on the global stage, a situation that urgently needs to be addressed.’
“Our economy, as it is, is in tatters. It is in some kind of quagmire. It doesn’t matter how you look at it or policies you’re trying to introduce here and there, nothing will work,” the lawmaker said
He drew a parallel with other countries, noting that they also don’t mix currencies: foreign currencies in the UK and the US must be exchanged at bureaux de change, and salaries are paid only in local currency.
Regrettably, Nigeria’s government’s tolerance for foreign currency use is hindering any meaningful demand for the naira, Nwoko asserts.
To restore stability to Nigeria’s economy, Nwoko proposes a significant change: all foreign transactions must be made in naira, compelling foreign buyers to use the local currency.
“Nothing will work as long as we keep tying the exchange rate to our consumption. When we became an independent nation we had naira and our currency was quite strong.
“Then suddenly, we began to have other currencies, dollar, particularly, and pounds and now Euro. There’s no country that I know in the world that has the use of multiple currencies.
“If you go to Britain with the dollar, you must change it at the BDC. You cannot pay for anything with the dollars in the UK. Everybody is paid their salaries in pounds in the UK. The same thing when you go to America. Everybody uses dollars.
“So, for things to work, assuming that we agree to phase out the use of foreign currency in Nigeria, what it means is that if you want to buy oil, gas or gold in Nigeria, it would require you to use only the naira.
“So, if they’re coming from the UK for example, they’d look for Naira so that they can transact because they know they can’t use any other currency.
“Currently, nobody looks for Naira because we’ve made it so easy for them to transact with other currencies. They can come here with any currency and that means effectively, there is no global demand for our Naira. Our money has no value beyond Naira.
“For things to work, we must prevent the use of foreign currencies and then people will start to look for the Naira. When they begin to look for Naira, our currency will appreciate,” he stated.
Nwoko – who introduced a bill in the Senate calling for a ban on the use of foreign currency in Nigeria as a step to restoring the naira and the economy – argues that it’s actually a countrywide replica of the Akan system.
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