Economy
FG worried on use of dollar as second currency in Nigeria’s market
The federal Government is worried by the use of dollar as means of payment or legal tender in the local market in Nigeria. The practice is seriously affecting the value of naira as most Nigerians are fast losing confidence in the local currency as a store of value.
The naira is the only legal tender in the country but in most parts of Nigeria, Lagos and Abuja in particular, lands are sold in dollars, prices of some products are denominated in dollars, school fees are quoted in dollars and hotels charge and collect dollars for rooms and other services. In Japan and other developed countries, payments for any local transactions are done in the local currency unit; their nationals insist on payment for goods and services in local currency.
Reacting to reporters question on the use of dollar in Nigeria local market CBN Governor Mallam Sanusi Lamido Sanusi said that the dollarisation of the Nigerian economy is of serious concern to the President, the Central Bank of Nigeria, the Economic management team and every body and that the CBN is coming up with a policy to stop the practice.
He said that as a first step, the CBN will soon stop the cash sale of dollars to Bureaux De Change, where members of the Nigerian public usually make their purchases of dollars in cash to make transactions within the country.
Mallam Sanusi Lamido Sanusi at the joint briefing to mark the end of the 2012 IMF/World Bank Annual Meetings with Dr Okonjo-Iweala in Tokyo Japan said that the idea of introducing the N5, 000 note was to check mate the practice of the movement of huge funds around the country in dollars. Sanusi whose proposal to introduce the N5, 000 currency note into the Nigerian market was halted by the federal government following heavy criticism against the move, said the introduction of the N5, 000 note was to check the dollarisation of the Nigerian economy by providing Nigerians with heavy cash transaction and a higher denomination.
His words, “The dollarisation of the economy is a big problem for all of us and it is something that we are going to walk towards taking stopping. One major plank of solving the problem of dollarisation was the N 5, 000 note, because that is one of the reason people go for dollars, and that is the reality; if you have inflation over a long time; if you have had devaluation over sometime; your currency, because the naira is not just a medium of exchange but also a store of value, if your currency loses its position as a store of value, you have a problem. “People carry $10, 000, that is N1.5 Seventy per cent of the dollars people buy from the BDCs is not for transactions outside Nigeria. They move dollars from one part of the country to another. In fact, from one part of Abuja to another.
“In a brief case, you can carry a $100, 000. That is about N15 million. Now part of the logic for introducing higher denomination is to provide genuine high-value cash users with a note that is a store of value as a first step towards our attempt to eliminate the use of dollar to move cash around because the dollar has became the second national currency”.
The CBN boss who revealed that even President Goodluck Jonathan was worried over the development said that under the new policy to be announced shortly, transactions between the apex bank and BDCs, on the one hand, and between BDCs and their customers would be done online.
He explained further that those who honestly need to make payments outside the country would have the recipients paid directly from the bank accounts of the BDCs or take the option of buying travellers’ cheques. According to him, “we are worried about it. The president is worried about it. We are all worried about it and we are coming with a fresh policy to stop selling cash dollars to BDCs.
“We will credit their accounts. If you want to pay for medical bills abroad, you give the hospital account. If you want to pay school fees, you do transfer like everybody else.
“If you want to travel, you buy travellers’ Cheque or get money on your cards, instead of people moving around with dollars. But what is happening now is that if you want a N2 million transaction, you have to carry bags of naira cash. And this was part of the logic of bringing in a higher denomination for people who do high-volume cash transaction to reduce the amount of paper money they carry along.
“I am glad that you asked that question because you are now beginning to think about some of the concerns that we have as managers of the economy because you have to print so much paper money and it is because people don’t want to carry so much papers in cash that they are carrying dollars and we cannot let it continue to happen. In America you cannot transact business with Pounds Sterling. You cannot and we will deal with it. It will stop”.
The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.
The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.
He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.
“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”
Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”
The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.
With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.
Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.
The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.
He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.
Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.
The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.
The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%.
The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.
Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.
The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.
Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.
-
News3 days agoNigeria to officially tag Kidnapping as Act of Terrorism as bill passes 2nd reading in Senate
-
News3 days agoNigeria champions African-Arab trade to boost agribusiness, industrial growth
-
News3 days agoFG’s plan to tax digital currencies may push traders to into underground financing—stakeholders
-
Finance1 week agoAfreximbank successfully closed its second Samurai Bond transactions, raising JPY 81.8bn or $527m
-
News1 week agoFG launches fresh offensive against Trans-border crimes, irregular migration, ECOWAS biometric identity Card
-
Economy3 days agoMAN cries out some operators at FTZs abusing system to detriment of local manufacturers
-
News3 days agoEU to support Nigeria’s war against insecurity
-
Uncategorized3 days agoDeveloping Countries’ Debt Outflows Hit 50-Year High During 2022-2024—WBG
You must be logged in to post a comment Login