The Risks of Dollar Spending in Nigerian Elections
A Senior Partner and Economist at SPM Professionals, Paul Alaje, has raised concerns about the use of United States dollars by Nigerian politicians during the 2027 general elections. He warned that this practice could undo recent efforts by the Central Bank of Nigeria (CBN) to stabilize the economy.
Alaje made his remarks during a Business, Economy and Financial Reporting training organized by Premium Times Academy in collaboration with the CBN. He emphasized that the use of foreign currency in political activities has historically weakened the naira, drained foreign reserves, and undermined monetary policy.
“My dear journalists, please, I want you to join me in this approach. Let us do everything possible to push the narrative that politicians should not share dollars during the 2027 election. Because all of these gains achieved by the Central Bank in the last two years will be eroded. All of it.”
He explained that dollar usage puts pressure on foreign reserves, leading to a loss of confidence and potentially forcing the CBN to realign the currency, which would further weaken the naira. According to him, such practices also fuel exchange rate instability, erode investor confidence, and worsen inflationary pressures.
Monitoring Political Spending
Alaje urged anti-graft agencies like the Economic and Financial Crimes Commission (EFCC) to monitor political spending ahead of the polls and ensure that transactions are conducted strictly in naira. He called for government policies that prevent the use of foreign currency in political activities.
“We are not saying that you cannot do your political activity. We are not politicians. But you see, don’t spend dollars. The central bank should also show interest. Don’t spend dollars at all. So, whatever you want to do, the central bank can use different methods to mop up excess liquidity in circulation. But it will not affect our reserve, which is very important.”
He further appealed to the National Assembly and the Independent National Electoral Commission (INEC) to establish rules requiring that all campaign and election expenses be paid in local currency. “If we must spend money for elections, let it be in naira. That is the only way the Central Bank can manage our reserves effectively.”
Historical Context of Dollar Circulation
Alaje, who has tracked election spending since 1998, noted that excessive dollar circulation during campaign seasons has always caused post-election economic instability. He highlighted that curbing such practices would help sustain current monetary gains and protect Nigeria’s fragile economic recovery ahead of 2027.
“Over the years, the use of United States dollars by politicians during election campaigns has become a recurring feature of Nigeria’s political process. Although Nigeria’s Electoral Act 2022 sets spending limits for candidates, enforcement has remained weak, with reports suggesting that politicians often exceed these limits using untracked cash and foreign currency.”
During major party primaries and general elections, it is not uncommon to hear of delegates or political agents being paid in dollars, especially during internal party contests. Studies by election observers and civic groups show that vote-buying remains widespread, with voters in some areas reportedly receiving between N5,000 and N10,000 each.
Debt Profile and Industrialization
On Nigeria’s growing debt profile, the economist expressed concern that rising borrowings have not translated into meaningful economic growth. “In the last 15 years, our average borrowing rate has grown by about 20 per cent, while economic growth remains below 3 per cent. That shows our debt is not impacting the economy as it should.”
He advised that government borrowings should be tied strictly to capital projects that could boost productivity and not to fund recurrent expenses. “If our revenue projection does not meet recurrent expenditure, we are already saying we will borrow to service consumption, not production,” he warned.
Alaje also identified weak industrialization as a major reason for Nigeria’s slow economic progress, urging policymakers to prioritize the manufacturing and secondary sector. “Nigeria’s economic miracle is in the secondary sector. Until we fix that, successive governments will keep trying, but results will remain minimal.”
Strengthening Financial Journalism
The training, attended by economic and financial reporters, focused on improving data-driven journalism and deepening understanding of monetary and fiscal policies. In his address, the Senior Manager, Business and Partnerships at Premium Times Services Limited, Olayinka Lawal, said the Premium Times Training Academy was established to strengthen professionalism, ethics, and excellence in journalism through continuous learning and practical exposure.
Lawal noted that the partnership with the Central Bank of Nigeria reflected a shared commitment to improving the quality of financial journalism and ensuring that economic reporting remains factual, ethical, and insightful. He added that the two-day training was designed to deepen participants’ understanding of Nigeria’s economic and financial systems, strengthen their analytical capacity, and improve how complex financial policies are communicated to the public.
