The Central Bank of Nigeria (CBN) has condemned the rising trend of currency substitution and dollarisation of the economy in recent time, reiterating that the naira remains the only legal tender in the country.
In a circular to all banks issued by Director of Banking Supervision, Mr. K. O. Balogun, on Friday, the CBN warned the general public that it is illegal to price of any product or service (visible or invisible) in any foreign currency in Nigeria.
The apex bank also pointed out that no business offer or acceptance should be done in the country in any currency other than the naira.
The CBN warned deposit money banks in the country to desist from the collection of foreign currencies for payment of domestic transactions on behalf of their customers and the use of their customers’ domiciliary accounts for making payments for visible and invisible transactions (fees, charges, licences e.t.c) originating and consummated in Nigeria.
While confirming that it was aware of this development, the CBN reminded the general public that Section 15 of the CBN Act 2007 provides that the unit of currency in Nigeria shall be the naira.
Section 20 (1) of the same Act provides that the currency notes issued by the bank shall be legal tender in Nigeria at their face value for the payment of any amount and Section 20 (5) further provides that a person who refuses to accept the naira as a means of payment is guilty of an offence and liable on conviction to a fine or six months imprisonment.
Nonetheless, the CBN explained that foreigners, visitors and tourists are encouraged to use their cards for payments or exchange their foreign currency for local currency at any of the authorised dealers’ outpost including hotels.
The apex bank stressed that this circular supersedes the provisions of Memorandum 16 of the Central Bank of Nigeria Foreign Exchange Manual and Paragraph (XI) Section 4.2.1 of the Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2014/2015.
The CBN also warned that appropriate sanctions shall be meted on any bank that breaches the regulation.