In a decisive move to stabilize the nation's currency and strengthen economic sovereignty, the Federal Government of Nigeria has officially barred all Ministries, Departments, and Agencies (MDAs) from entering into contracts denominated in foreign currencies, particularly the US dollar.
The directive was issued following a Federal Executive Council (FEC) meeting presided over by President Bola Ahmed Tinubu at the State House, Abuja. The policy, effective immediately, mandates that all contractual agreements involving MDAs must be exclusively priced and settled in the Nigerian Naira.
Speaking on the development, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, emphasized that the decision aligns with broader economic reforms aimed at boosting investor confidence, curbing inflation, and reducing undue pressure on the foreign exchange market.
“It is economically unwise and legally unjustifiable for government agencies to conduct business in foreign currencies within our sovereign borders,” Edun stated. “This move ensures fiscal discipline and protects the Naira as our national currency.”
The government noted that the frequent practice of dollar-denominated contracts has contributed to volatility in the exchange rate and created distortions in public sector expenditure. The new policy is also expected to encourage local capacity development and reduce overdependence on foreign exchange.
MDAs have been directed to review existing contracts with a view to renegotiating and converting them to Naira where applicable, subject to legal and financial due diligence.
The Federal Government assures stakeholders, contractors, and international partners that transitional guidelines will be issued to ensure smooth compliance without disruption to ongoing public sector projects.