The Federal Government of Nigeria has introduced an amnesty program to draw out foreign exchange hoarded by individuals outside banks in a bid to support the nation’s currency.
According to the government, individuals won’t be subjected to tax audits and the government won’t expropriate the assets, Nigeria’s finance ministry said in a statement on October 31 2024 .
The program will be open for nine months.
“The scheme offers a secure, confidential channel for people to reintegrate their legitimate foreign-currency funds, promoting stability and growth for our nation,” Finance Minister, Wale Edun, said in the statement.
In response to the Naira’s continued depreciation, residents have been stockpiling dollars as a safeguard. The Naira, ranking as Africa’s second weakest currency against the dollar in 2024, after the Ethiopian Birr, fell by 2.7%, reaching a record low of 1,675.49 at the end of October 2024.
Low liquidity in the foreign-exchange market has been blamed for the Naira’s woes.
“[Such cash] is unsafe, insecure, and outside legal limits. They will be allowed forbearance to bring dollars cash. Let me emphasize once again: it is to bring dollars that they are holding outside the system to get them in and credit it to their bank accounts, as long as it is not proceeds of crime or illicit money,” Edun said to journalists.
“They should just meet the standard Know-Your-Customer criteria of banks and have an opportunity to bring in those funds, making them safe, secure, and available through regular economic activity.”
The Central Bank of Nigeria (CBN) has faced dwindling reserves and a volatile exchange rate in spite of a move by President Bola Tinubu in July 2024 to float the Naira in an effort to unify the official exchange rate to the dollar and the black market rate.
Nigeria🇳🇬Formally Unifies Foreign Exchange Trading Rates as Naira Devalues by 36%
This marks the first time, since 2016, that the Naira has recorded a big fall on the official market before the Central Bank of Nigeria introduced a managed exchange rate in 2017.… pic.twitter.com/u8UWAbwaFb
— BitKE (@BitcoinKE) June 15, 2023
This latest effort comes soon after President Tinubu unveiled the ‘Naira for Crude’ initiative, a new policy allowing local refineries to purchase crude oil using either the Naira or the U.S. dollar.
🇳🇬INFLATION | The Nigeria Government’s ‘Naira for Crude’ Initiative Expected to Reduce U.S. Dollar Reliance by 40%
By lessening the reliance on U.S. dollars, the initiative aims to stabilize the Naira, which has experienced significant depreciation in recent years.
This… pic.twitter.com/nfrjnikO9S
— BitKE (@BitcoinKE) September 4, 2024
The ‘Naira for Crude’ initiative is expected to ease the demand for foreign currency and stabilize the nation’s economy.
Nigeria, which finally dropped money laundering charges against senior Binance official, Tigran Gambaryan, has also accused the crypto exchange and other such platforms offering peer-to-peer exchange between cryptocurrency and the Naira as contributing to destabilization of the exchange rate.
🇳🇬REGULATION | #Nigeria Government Withdraws ML Case Against #Binance Officer But Company Tax Evasion Charges Remain
The money laundering case against @binance would proceed without Gambaryan as he seeks medical attention abroad. https://t.co/ruB4BoZkrK #Tigran pic.twitter.com/39b3pIHirH
— BitKE (@BitcoinKE) October 23, 2024
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