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A country’s currency matters; therefore, the naira should matter. Yet, the naira, like the currency of many import-dependent economies, has one denominator: weakened currencies, caused mainly by unbridled demand for dollars and other hard currencies for imports.

The Nigerian currency has depreciated sharply since President Bola Tinubu floated it in June 2023. Its weakened state strongly contributes to high commodity prices and soaring inflation.

In the one year to June 2024, the naira depreciated by 216.64 per cent against the dollar; it exchanged at N471 per dollar in June 2023 to N1,482.72 in June 2024. On Monday, the rate was N1,599.55 to $1.

In most countries, local currencies are used as the primary medium of exchange, allowing for the smooth and efficient flow of goods, services, and capital within the economy.

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However, in Nigeria, many transactions are done locally in dollars, pushing the local currency to the back seat and further piling pressure on the naira. There have been instances of Nigeria-based schools demanding dollars for payment of fees, and estate agents demanding dollars for rent.

Many politically exposed persons keep their loot in dollars. Indeed, the naira value depreciates more during electioneering.

However, the law is solidly against transactions made in any currency other than the naira in Nigeria.

Section 20 of the CBN Act 2007 states that the currency notes issued by the bank are legal tender in Nigeria at their face value for the payment of any amount.

It says a person who refuses to accept the naira as a means of payment is guilty of an offence and liable to a fine or imprisonment.

So, demanding dollar payments for goods and services offered locally is punishable under the law.

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Lately, the Economic and Financial Crimes Commission has been using the provisions of the CBN Act to go after some people who are ignoring the law and offering goods and services priced in dollars rather than the naira.

For instance, a Lagos-based jeweller was arrested, arraigned, and convicted for refusing to accept naira payment for goods following the EFCC’s sting operation. The vendor had rejected the naira for a diamond watch, insisting on $5,700. He was sentenced to a four-year jail term with an option of a N650,000 fine.

However, the conviction of a soft target is not a strong deterrent to those who continue to disrespect and disregard the local currency by insisting on dollar payments.

The EFCC should go after bigger players who openly demand dollars for local transactions.

First, the government should restore confidence in the naira as a store of value. The naira depreciation has only led to a marginal drop in local petrol prices, even though crude oil prices have dropped significantly in the international market.

So, on the government side, all hands must be on deck to strengthen the naira, while the citizens must respect the naira and make local transactions in the local currency.

The government should crack down on corruption, especially the one that happens among officials, which pressures the naira. In many instances, naira is changed to dollars not to import goods, but to be laundered abroad.

Thus, beyond arresting and prosecuting a jeweller, the EFCC and the ICPC must work hard to fight corruption by the political elite. Economic reforms could hardly succeed without a strong fight against graft.

Efforts must be intensified to diversify the economy, strengthen the country’s manufacturing base, attract more foreign investments, and broaden the country’s export base by reducing the dependence on oil revenue.

There must be strict enforcement of the use of the naira for local transactions.