Market News

By Progress Godfrey, Abuja

Economist and Senior Partner at SPM Professionals, Dr. Paul Alaje, has urged the National Assembly, the Independent National Electoral Commission (INEC), and the Economic and Financial Crimes Commission (EFCC) to introduce and enforce laws prohibiting the use of foreign currency, particularly the dollar, in political spending ahead of the 2027 general elections.

He cautioned that the unrestrained use of dollars by politicians during campaigns poses a serious risk to Nigeria’s economic stability and further undermines the naira.

Speaking to journalists at a two-day Business, Economy and Financial Reporting Training organised by Premium Times Academy in collaboration with the Central Bank of Nigeria (CBN) in Abuja, Wednesday, Alaje said election-related dollar transactions had consistently disrupted Nigeria’s economic balance since 1998.

“Spending foreign currency will affect our economy. I am saying we should spend our local currency so that the Central Bank can manage the pressure. But when politicians start spending from our foreign reserves, that becomes the real challenge,” he said.

According to him, historical data shows that heavy dollar spending during election seasons often triggers economic downturns in the following year.

“I have tracked election spending since 1998. The flow of dollars into the economy peaked in 2010, 2014, and 2023. Each time, the following year, our economy dipped sharply,” he explained.

He noted that using foreign currencies for campaigns drains the nation’s reserves, worsens exchange rate instability, and fuels inflation.

Alaje called on the National Assembly and INEC to make it mandatory that all campaign-related transactions be carried out in naira, while empowering the EFCC to go after defaulters.

“If you must spend, whether within INEC’s approved limit or beyond it, it must be in naira. EFCC should follow up anyone who spends in foreign currency. Then, for the first time, we’ll have a relatively stable economy after an election,” he added.

The economist also criticised Nigeria’s borrowing practices, stressing that loans are often used for consumption rather than investment, resulting in minimal economic impact.

“We’ve not spent enough of our borrowings on roads, rails, or power. Too much goes into administrative costs or private pockets. That’s corruption,” he stated.

Alaje urged lawmakers to ensure that future borrowings by federal and state governments are directed strictly toward capital projects like infrastructure and align with the Medium-Term Expenditure Framework (MTEF).

He added that Nigeria’s ambition to become a $1 trillion economy by 2030 would only be achievable if the country maintained an annual growth rate of 15–17 per cent and channelled investments into productive sectors.

He therefore encouraged state governors to replicate the infrastructural and economic strides of Lagos and Abuja while promoting regional development for inclusive national growth.