- Nigeria’s federal government plans to automate and regulate foreign exchange transactions to deter speculation and enhance market integrity
- Two executive orders signed by President Tinubu aim to boost the economy and provide incentives for foreign currency issuance
The Nigerian federal government is set to usher in a new era for the foreign exchange market by automating transactions and clamping down on speculators aiming to exploit the system. This ambitious initiative, unveiled by Wale Edun, Minister of Finance and Coordinating Minister of the Economy, during a panel session at the 29th Nigeria Economic Summit (#NES29) in Abuja on Monday, is expected to transform the forex landscape in the country.
Under the comprehensive plan, all activities in the foreign exchange market, encompassing both the official and parallel segments, notorious for significant arbitrage opportunities, will be subjected to rigorous digital oversight. Individuals found engaging in illicit practices will face legal repercussions as the government seeks to reestablish integrity and transparency in forex transactions.
In a significant move, President Bola Ahmed Tinubu has recently signed two executive orders aimed at bolstering the Nigerian economy and foreign exchange market. Minister Edun elaborated on these orders, stating, “One of them is an executive order that allows forbearance for all the cash in the economy to come in and formally boost the money supply legally. There’s another executive order that allows domestic issuance of foreign currency issues so that it will allow incentive to provide that foreign exchange for whatever source.”
Minister Edun went on to reveal that a comprehensive plan to rejuvenate the foreign exchange market would soon be introduced. Acknowledging the current ineffectiveness of Nigeria’s forex market due to liquidity challenges, he emphasized the government’s commitment to ushering in a transformative change.
“Foreign exchange market will be simplified and reformed, ensuring that all legal and legitimate transactions will fall within the purview of the authorities and the formal foreign exchange market. Anything outside that will be considered illegal, a criminal offense, and will be punishable,” Edun firmly asserted.
The move to modernize forex transactions aligns with the government’s broader agenda of economic reform and stability, aiming to create a conducive environment for both domestic and international investors while cracking down on harmful speculative activities that have long plagued the foreign exchange market. The finance minister’s announcement at the Nigeria Economic Summit marks a significant step towards this goal.
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