Nigeria Launches Amnesty to Recover Foreign Currency, Strengthen Naira

In a bid to stabilize the plummeting naira, Nigeria has introduced an amnesty program aimed at reintroducing foreign currency currently held outside the formal banking sector into the financial system.

Announced on October 31, this nine-month initiative promises tax and penalty-free reintegration of funds.

Finance Minister Wale Edun emphasized that individuals bringing foreign currency into the banking system through this program will be shielded from tax audits and asset seizures.

Edun assured participants of the program’s confidentiality, stating, “The scheme offers a secure, confidential channel for Nigeria to reintegrate their legitimate foreign currency funds, promoting stability and growth for our nation.”

He clarified that participants need only meet the banks’ standard Know Your Customer (KYC) requirements to safely deposit funds, with no questions asked.

This amnesty program comes at a critical juncture, as Nigeria’s currency, which recently hit a record low of 1,675.40 naira per dollar, has become Africa’s second-worst performing currency this year, only behind Ethiopia’s birr.

Faced with this decline, many Nigerians have resorted to holding dollars as a hedge against the naira’s instability, adding further strain to the foreign exchange market’s liquidity.

Minister Edun highlighted the opportunity for both private citizens and the country’s financial system, as idle foreign currency could be mobilized to bolster foreign reserves and improve the exchange rate.

“This situation presents a unique opportunity,” Edun noted, “not only for individuals who wish to comply with laws and standard business practices but also to channel idle dollars into the financial system.”

The naira’s current challenges stem partly from liquidity shortages in the foreign exchange market. Since assuming office, President Bola Tinubu has implemented reforms to allow the naira to float more freely, dismantling the longstanding multi-tiered exchange rate system.