Dogara Warns: Nigerians Could Switch to Dollar Amid FX Crisis

Dogara: Nigerians Might Ditch the Naira for the Dollar if FX Crisis Persists

Yakubu Dogara, the former speaker of the House of Representatives, has stated that Nigerians might be forced to ditch the naira for the U.S. dollar amid the consistent devaluation of the currency.

Speaking at ThePlatform, an annual event organised on Democracy Day, by Poju Oyemade, the Senior Pastor and Founder of The Covenant Nation (TCN), on Wednesday, Dogara observed that Nigerians have lost faith in the naira, as it has lost over 100% of its value.

“The most critical challenge the economy is faced with now is the FX crisis. This is by far the major malaise afflicting our economy at the moment,” he said.

“In June 2023, the Central Bank of Nigeria (CBN) undertook a critical policy decision to implement a new foreign exchange policy that provides a unified and free-floating exchange rate; this implies that the exchange rate of the local currency to the USD and all other currencies will henceforth be based on freely-priced transactions between willing buyers and willing sellers.

“Since then, the naira has depreciated against the USD in the parallel market and this has seen the value of the naira cascading to a downward spiral in the parallel market where it has lost more than 100% of its value.

“If the current downward spiral of the naira is not arrested, I fear we might get to a point where we will have to ditch the naira, and Nigerians at that point won’t mind and bother where the CBN headquarters is — whether in London, Washington, Newyork, Beijing, provided their currency is very strong. God forbid.”

Dogara argued that the most productive nations are not necessarily the nations with the strongest currencies, and that the naira’s melting point was when USD stashed abroad by corrupt Nigerian politicians was pulled out of the economy, triggering a demand for the currency.

“The most productive nations are not necessarily the nations with the strongest currencies,” he said.

“What was Nigeria producing in the days of General Abacha, ex-president Olusegun Obasanjo, and former president Ebele Goodluck Jonathan when the naira was a bit stronger and more stable. What were we producing then that we are not producing now?

“The only inflation point we witnessed was due to the advent of the Bank Verification Number (BVN), which crippled the ability of corrupt officials and shady characters to keep their loot in anonymous bank accounts. Almost all ill-gotten money was stashed in USD in private vaults, as the naira is too bulky to wire out.

“The initial withdrawal of such funds from the banking system was what triggered the first wave of the hyper demand for USD.”

Dogara also lamented that about 63% of Nigerians are living in multi-dimensional poverty.

“The 2022 multi-dimensional survey for Nigeria index for Nigeria states that 63% of the persons living in Nigeria, approximately 133 million people, are multi-dimensionally poor,” he said.

“That being the case, without any fear of contradiction, our democracy is not working for the majority of our citizens. Although they are alive and free, they lack the means with which to pursue happiness. Poverty is a greater threat to democracy than a weak institution. We must never stop putting pressure on the government to set clear targets when it comes to addressing the causes of poverty.”