In other to de-dollarise the nation’s economy amid flutuation in the value of the naira against the United States dollar, an investment analyst, Adejumo Isaac, has called for ban on all foreign currency transaction in cash in the country.
In a statement, on Thursday, Isaac, advised the Central Bank of Nigeria (CBN) to declare cashless policy on forex, saying that would enable majority of forex cash domiciled in people’s homes to automatically enter the banking system.
It could be recalled that the naira traded flat against the dollar, on Thursday, at N832.32/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM), the country’s official exchange rate window.
According to data from FMDQ Securities Exchange, a platform that oversees foreign exchange (FX) trading in Nigeria, the daily FX turnover is at $115.41million and that reflected increased FX inflow in the economy on Thursday, 30th November, 2023.
According to Data, the local currency, on Monday, hit an intra-day trading high of N1,137 and a low of N700.
However, speaking on how to shore up the value of the naira, Isaac, added that it should be a criminal offence with 6 months imprisonment for anybody to hold physical forex cash for any transaction in Nigeria.
He said, “All transactions involving use of forex should be done electronically via transfer or cheque payment that must pass through the bank account of payer and receiver.
“Give one month notice to anybody in Nigeria holding physical forex cash to deposit the same with commercial banks, thereafter, it becomes a criminal offence attracting jail terms of at least 6 months with no option of fine for anybody to hold physical forex cash for any transaction in Nigeria.
“In all fairness, dollars, pounds, Euro etc are not used to BUY petty food items or any retail items in the market that warrant exchange of physical forex cash.
“Generally, transactions that involve use of forex such as paying School fees, medical fees, importing raw materials for production, amongst others do not involve exchange of physical cash but they naturally pass through banks which is done electronically, therefore, there are no strong arguments to hold forex cash.
“By this policy, majority of forex cash domiciled in people’s home will automatically enter the banking system and this will make forex liquidity robust for the good of the economy as availability will make stability of exchange rate possible thus reduce to the barest minimum volatility and unsubstantiated cum speculative demand as well as mop up of the available forex in the country by few privileged individuals for personal gains that inflicted more pains to the citizens.
“For the long-term solution is to increase our exports, firstly from increasing crude oil production volume to at least 2mbpd to boost dollar inflow into the economy (this volume was achieved and relatively stable for a number of years between 2012-2015), secondly to promote backward integration in terms of local sourcing of raw materials for production in order to reduce imports.
Ensuring petroleum products are refined in the country to save the volume of forex spent on importation of refined petroleum products which can thereafter be available for other uses.”