The Legal Implications of Foreign Currency Use in Nigeria

Abstract

Despite the Naira being the sole legal tender of Nigeria, this article found that transactions in the country are also being carried out in other currencies. This article examined the stance of the law, and the economic implications when other legal tenders are used to trade in Nigeria. It further considered the reality of this act in today’s global economy. The article found that trading in Naira and other currencies in Nigeria causes inequality and distortions to the economy of Nigeria. It also found that prohibiting the practice of trading in other currencies could make Nigeria less competitive in attracting foreign investment and talent. Hence, to solve the problems this article found in trading in Naira and other currencies, this article suggests that the lawmakers should make policies that allow for other currencies' payments in specific circumstances. Additionally, the government could establish guidelines for companies to follow when paying salaries in foreign currency, ensuring that such payments do not undermine the Naira or create economic distortions.