- Says new initiative driven by demand, supply dynamics
The Federal Government on Thursday announced a nine-month programme beginning on October 31, 2024, that allows individuals to deposit dollar bills held outside the formal banking system without scrutiny.
It said the new initiative aims to address the rising costs of commodities influenced by the foreign exchange rate, driven by demand and supply dynamics.
Finance Minister and Coordinating Minister of the Economy, Wale Edun, revealed this after the 144th meeting of the National Economic Council, the country’s highest economic advisory body, chaired by Vice President Kashim Shettima at the State House, Abuja.
“There will be no penalty; there will be no taxes, and there will be no questions,” he told journalists at a briefing after Thursday’s conclave.
Edun said that, under this programme, individuals can bring in U.S. dollars in cash without facing penalties, taxes, or scrutiny, provided that the funds are not linked to criminal or illicit activities.
Participants will only need to meet the standard Know-Your-Customer requirements set by banks to secure these funds, integrate them into the financial system, and make them accessible for legitimate economic activities.
He explained, “One element of the cost increase is the foreign exchange rate, which is demand and supply. There will be a programme starting today, October 31, and lasting nine months that will allow people to bring in cash outside the banking system.
“[Such cash] is unsafe, insecure and outside legal limits. They will be allowed forbearance to bring dollars cash. Let me emphasise once again: it is to bring dollars that they are holding outside the system to get them in and credit it to their bank accounts, as long as it is not proceeds of crime or illicit money.
“They should just meet the standard Know-Your-Customer criteria of banks and have an opportunity to bring in those funds, making them safe, secure, and available through regular economic activity.
Edun said his ministry will first issue guidelines for the programme, followed promptly by additional guidelines from the Central Bank of Nigeria.
According to the Minister, this measure offers law-abiding individuals a way to formalise their cash holdings. It also provides the financial system with additional dollar reserves, which may help to stabilise the exchange rate.
“This is an opportunity, not just for people who would normally like to comply, to be compliant with the laws and normal business practice, but of course, it allows us 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,” he added.
Edun equally gave an update on government economic relief measures, saying 25 million Nigerians have benefitted from federal social protection initiatives, including digital outreach, microenterprise loans, and sector-specific support for power, agriculture, manufacturing, health, and compressed natural gas initiatives.
