The Federal Government has unveiled a new initiative allowing individuals to deposit US dollars held outside the formal banking system without facing scrutiny. This program is set to run for nine months and aims to tackle the rising costs of commodities affected by foreign exchange rates.
During a press briefing after the National Economic Council (NEC) meeting in Abuja on October 31, 2024, Finance Minister and Coordinating Minister of the Economy, Wale Edun, detailed the policy.
He reassured citizens, saying, “There will be no penalty; there will be no taxes, and there will be no questions.”
This initiative is designed to encourage individuals to bring in cash dollars that are currently considered “unsafe, insecure and outside legal limits.”
Individuals participating in the program will only need to fulfill standard Know-Your-Customer requirements established by banks to access their funds.
Edun emphasized, “They just meet the normal ‘Know Your Customer’ criteria of banks and they have an opportunity to bring in those funds, make them safe, make them secure, and make them available through normal, economic activity.”
The program is a direct response to the ongoing challenges in the foreign exchange market, which have been driven by demand and supply dynamics.
Edun explained that one significant factor behind rising costs is the foreign exchange rate. He noted, “One element of the cost increase is the foreign exchange rate, which is demand and supply.”
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The initiative is also viewed as a way to formalize cash holdings, which could help bolster the financial system by providing additional dollar reserves that may stabilize the exchange rate.
Edun stated, “This is an opportunity… to bring those dollars from where they are doing nothing to where they are within the financial system, they add to our reserves, and of course can help with the exchange rate.”
In preparation for the program, the Ministry of Finance will issue guidelines, which will be supplemented by additional instructions from the Central Bank of Nigeria.
Moreover, Edun provided an update on the government’s social protection efforts, revealing that 25 million Nigerians have benefited from initiatives including digital outreach, microenterprise loans, and sector-specific support in areas such as power, agriculture, and health.
