Lawmaker urges FG to penalize employers paying salaries in foreign currencies

Lawmaker representing Delta North, Sen. Ned Nwoko on Tuesday called on the Federal Government to impose charges on employers who pay their workers in foreign currencies.

Nwoko, who stated this in an interview explained that it was imperative to cease all dollar denominated transactions within Nigeria, particularly the payment of foreign workers in dollars, so that the naira can appreciate and remain stable.

He also said urged the government to make it a policy that all foreign workers in the country received their salaries in naira denominated accounts.

“I have emphasize the imperative of ceasing all dollar transactions within Nigeria, particularly the payment of foreign workers in dollars.

“This practice not only undermines confidence in the domestic currency but also exacerbates socio-economic disparities within the country.

“I am glad to see that the Economic and Financial Crimes Commission, EFCC, has recently cautioned schools, supermarkets, hotels, and other entities against pricing their services in dollars or any other foreign currency.

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“Furthermore, I call for the imposition of charges on employers who pay for services in foreign currencies. Employers should mandate all their foreign staff to open a naira account.

“To this effect, urgent amendments to relevant legislation, such as the CBN Act and the Foreign Exchange Act, are needed, as they currently do not explicitly prohibit such practices.

“Additionally, all balances in domiciliary accounts should be converted into naira.

“In the pursuit of naira stabilization, the federal government must take decisive action to announce the conversion of all foreign currencies held in individuals’ and corporate organizations’ domiciliary accounts into naira, at a rate determined by the CBN.

“Domiciliary accounts, as conduits for holding foreign currencies, have significantly contributed to naira volatility and have not served the nation’s economy well.

“Domiciliary accounts enable individuals to acquire dollars in the parallel market, serving as a hedge against inflation or as a means to offload currency when the local currency depreciates beyond a predetermined point,” he said.

Nwoko said that this practice significantly contributed to the swift devaluation of naira to dollar and must be discontinued.
He added that aside funds held in naira were more likely to be reinvested within the domestic economy.

“The FG must abolish the parallel market, as its existence legitimizes illegality, leading commercial banks to engage in round-tripping and illicit profits while neglecting traditional lending, thereby stifling the credit economy.

“As the parallel market expands and becomes the primary choice for transactions by the majority, the government’s control over the official market diminishes, leading to a diversion of official transactions to the parallel market,” the lawmaker said.


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