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The governorship candidate of the People's Democratic Party (PDP) in Ogun State, Ladi Adebutu, on Friday, called witnesses in the petition he filed to challenge the victory of Governor Dapo Abiodun of the All Progressives Congress (APC).

The call followed the admission of all undisputed exhibits as tendered from the bar by the petitioners on Thursday, July 6.

As the court resumed sitting on Friday, the petitioners‘ counsel, Gordy Uche (SAN), told the tribunal that “the petitioners intend to start their trial by calling their witnesses.”

Uche had filed a schedule of witnesses that the petitioners intended to call, in compliance with the pre-hearing report and they intend to call 11 witnesses for the day.

With no objections from the respondents, the Hamidu Kunaza-led tribunal permitted the petitioners to call their witnesses.

The witnesses were cross-examined by Remi Olatubora, counsel to the Independent National Electoral Commission (INEC); Taiwo Osipitan, representing Dapo Abiodun and Tayo Oyetibo of the APC.

One of the witnesses, Oduwole Ganiu Adekunle from Sagamu Local Government area of the state alleged that, thugs hired by APC disrupted voting in his polling unit.

Oduwole said, the thugs armed with guns, cutlasses and other dangerous weapons stormed his polling unit and hijacked ballot boxes and other voting materials.

He added that, the thugs also chased INEC officials and voters away thereby preventing other people from voting.

"My Lord, around 1.47 pm on the election day, APC thugs carrying guns disrupted voting in my polling units.

“They (thugs) wore masks and threatened us. They were shouting ‘if cannot vote for APC and Dapo Abiodun, leave the polling centre’.

“They started beating and harassing everyone. They took the ballot boxes and papers. Some of them were even wearing APC hand-bands”, Oduwole said.

The court resumes on Monday for the cross-examination of more witnesses.

 

 

A serving Senator in the 10th National Assembly, who was a former Governor in Ogun State, Otunba Gbenga Daniel, has asked the incumbent Governor, Dapo Abiodun to stop the monthly pension being paid to him by the State government.

Daniel, in a letter titled, ‘Request To Suspend My Monthly Pension and Allowances’, asked that the N676,376.95 pension/allowances he is entitled to as a former governor be suspended.

According to him, the suspension of the pension was in compliance with his conscience, moral principle and ethical code against double emoluments that a serving Senator, who hitherto was a former State governor, shall not be entitled to the payment of pension and allowances from such a state.

Daniel, who is the new Senator representing Ogun East, was inaugurated alongside other Senators on June 13 at the National Assembly.

The Senator noted that he had not benefitted from any welfare packages, be it medical, furniture, transportation and others since he left office in 2011.

The letter addressed to Gov Abiodun reads: “I write to request for the suspension of my monthly pension/allowances of 676,376.95 (gross) (Six Hundred and Seventy-Six Thousand, Three Hundred Seventy-Six Naira, Ninety-Five Kobo) being paid as a former Executive Governor of Ogun State.

“This request is in compliance with my conscience, moral principle and ethical code against double emoluments that a serving Senator of the Federal Republic of Nigeria who hitherto was a former State Governor, shall not be entitled to the payment of pension and allowances from such state.

“It would be recalled that on Tuesday 13th June 2023, I was, with other elected Senators and Members of the House of Representatives, inaugurated as members of the 10th National Assembly.

“It is pertinent to also have it on record that since I left the office in 2011, I have not benefitted from any welfare packages be it Medical, Furniture, transportation etc.”

 

 

 

Last modified on Thursday, 06 July 2023 21:58

Government at all tiers and Nigerians home and abroad have been called upon to embrace and promote the rich cultural values of the Nation, towards making such a means of foreign exchange earner for the Country.

The Minority leader of the Ogun State House of Assembly , Hon. Lukmon Adeleye stated this at the annual Ojude Oba Festival, in Ijebu-Ode, Ogun State.

The minority leader, who doubled as a chieftain of one of the age groups, the Otun Egbe Bobagunwa Okunrin Akile  Ijebu said , "if well harnessed, the Ojude Oba festival should be a major source of income for the country". 

Hon Adeleye described the event to be a cultural festival that brings all ethnic groups together, saying " it is a festival that gives room for everyone to show their talents in one way or the other, while displaying the rich cultural values of the Ijebu people".

According to him, "the State government should look inwards to promote the annual festival beyond the shores of Nigeria and add more values to it". 

"Private organisations and well spirited individuals should also come together to make it a world class carnival to showcase the beauty of our cultural heritage to the world". 

Hon Adeleye who thanked the Awujale of Ijebu land, Oba Sikiru Adetona for creating such a rallying point for the Ijebus, said the festival has enhanced development in Ijebu land. 

 

He prayed that God would continue to sustain peace and harmony in Ijebuland and Ogun State, as more age groups are welcomed to join the regberegbes.

 

 

Last modified on Saturday, 01 July 2023 13:32

The Guardian in United Kingdom reports that  Nigerians are feeling the strain as their new president pushes through a series of unpopular policies that have earned him praise from foreign investors.

Bola Tinubu, who was sworn in on 29 May, has surprised many observers by taking a running start to his tenure of Africa’s most populous country. In little over two weeks he has banished a longstanding petrol subsidy, ejected the country’s central bank governor and ended restrictions on the rate of the naira, Nigeria’s currency.

The steps have fired up markets, sending stocks in what is also Africa’s largest economy to their highest level in 15 years. But they have also increased living costs and drawn criticism from many Nigerians who have faced years of economic mismanagement.

Joseph Essien, 47, a taxi driver in Lagos, said he had stopped working altogether because he was no longer making any profit after the rise in petrol prices. He said he used to spend about 5,000 naira (£8.40) a day on fuel, which would last him for a day of eight hours and then into the next. Last week he was spending about 15,000 naira on fuel that barely lasted him a day.

“Over the weekend I just told myself it wasn’t worth it; I’m just working to pay Bolt [the ride-hailing company] their commission and I’m left with nothing,” he said.

Tinubu, 71, who won as the ruling party candidate in February’s election, last week suspended Godwin Emefiele, the controversial central bank governor, after criticising his botched replacement of naira notes in the lead-up to the election.

Inflation hit an 18-year high and Nigeria’s debt soared to more than $150bn (£118bn) under Emefiele’s watch.

On Saturday, the national domestic security agency arrested Emefiele “for some investigative reasons”, without giving further details.

Rid of its former governor, on Wednesday the central bank floated the naira to foreign exchange buyers, signalling the end of Nigeria’s control of its official rate, which soon dropped by about 40% – the biggest fall in its history.

Countries including the UK had lobbied for that move as essential to boosting foreign investment. A Whitehall source said it meant “short-term pain for long-term stability”.

Nigerians were already reeling from chaos triggered by Tinubu in the first minutes of his presidency when he declared in his inauguration speech, off-script, that Nigeria’s costly fuel subsidy was “gone”. The move sparked panic-buying before pump prices tripled, leaving travellers stranded. Two states have announced three-day office weeks for their civil servants in response, while one has reduced school teaching to three days a week.

Bolt increased its minimum fares earlier this month after the fuel subsidy was dropped but the union for drivers using ride-hailing apps said the increase goes nowhere near covering petrol prices that have roughly tripled.

Drivers went on strike last week in protest, and this week suspended the strike while negotiating with Uber and Bolt. Nigeria’s main workers’ union has also threatened to strike.

Dosunmu Oluwaseyi, 35, the floor manager of a restaurant in the Victoria Island commercial district of Lagos, said she like many had taken to “trekking” to work, choosing shorter, cheaper bush taxi routes and making up the difference on foot.

“Some people stay at work,” she said. “They will not be able to go home every day. By the grace of God they should reduce [the price].”

Ikemesit Effiong, head of research at analyst company SBM Intelligence, said Nigeria was in “national sacrifice mode”. The devaluation of the naira combined with the dropping of the fuel subsidy was already causing inflation, he said.

He added: “The hope is that the end of the subsidy regime frees up enough resources, political trust and transparency permitting, to be channelled towards desperately needed infrastructural and social investment.”

Some have urged Tinubu, an archetypal “big man” with a reputation for lavish spending, to tighten his own belt in these times of need. They suggest shortening his convoys of blackout-windowed 4x4s, which can stretch to more than 60 cars, or getting rid of some of the seven aeroplanes in his presidential fleet.

Charlie Robertson of the emerging markets investment firm FIM Partners praised Tinubu’s policies, saying they had prevented Nigeria defaulting on its debts, which would have led to rampant inflation. “We were heading to [the situation of] Venezuela,” he said. “Millions of refugees pouring across the border desperate for jobs and stability.”

He said the fuel subsidy was “simply unaffordable”, and freeing up the naira would encourage investment in the country and could boost a stagnant private sector, potentially creating jobs. But he added: “This is the easy stuff to do. The hard stuff is to make the country ready for industrialisation and a boom.”

For now Essien, the taxi driver, sits at home with his family, desperately learning the coding language Python. “By the end of this month I hope to be able to get a grasp of an aspect of it, and look for remote jobs,” he said.

 

 

 

 

 

 

 

 

A former senator, Dino Melaye, on Friday, appeared before the Presidential Election Petition Court in Abuja as a witness in the petition filed by Atiku Abubakar and the Peoples Democratic Party (PDP) to challenge the outcome of the February presidential poll.

Melaye, dubbed as a star witness of the petitioners, told the court that the final result of the presidential election announced by the Independent National Electoral Commission (INEC) was wrongly computed.

The former senator, who is also the PDP candidate in the forthcoming Kogi State governorship election, is the 23rd witness the petitioners have called so far to challenge the victory of President Bola Tinubu in the disputed election.

Led in evidence by the petitioners’ lead counsel, Chris Uche, Melaye, who told the court that he was PDP’s National Collation Agent, identified himself as a businessman and a politician.

The witness said he refused to sign the final result announced by INEC chairman, Yakubu Mahmood, because of the wrong computation of the figures.

“The results were wrongly computed and announced. That was why I refused to sign. I don’t endorse fraud,” Melaye re-echoed his grouse that he had expressed during the collation of the results in February.

Under cross-examination by INEC’s lawyer, Abubakar Mahmoud, Melaye said most PDP agents across the country did not sign the Form EC8As which were the result from the polling units.

“It is not true that all the agents signed results of the election across the federation. Not all of them signed. I may not give you the actual number of our agents that did not sign the results in protest,” he told the court.

Giving another reason for rejecting the outcome of the poll, the witness said that the results brought to the national collation centre by state electoral officers were at variance with the results recorded in the state.

Melaye added that the results declared by INEC were also at variance with the ones computed from copies of the result sheets uploaded on IReV, an online portal designed to receive polling units result sheets real-time.

“My lords, exhibits have shown that result on the IReV was at variance with what was announced.

“What was brought to Abuja by State Returning Officers was totally different from what transpired in the states,” he added,” .

The witness also said he became aware of a third-party device deployed to manipulate votes in Tinubu’s favour through an INEC press statement prior to the election.

Under cross-examination by INEC’s lawyer, Mahmoud, Melaye said he voted at his polling unit in Kogi State, but returned to Abuja thereafter.

He added that he walked out of the national collation centre before the end of the process as the national collation agent of the petitioners when he discovered the fraudulent activities going on at the centre.

Three grouses

Melaye said that he had three major grouses with the conduct of the election, one of which was the refusal of INEC to transmit the election results electronically to its portal.

He said the Electoral Act 2022 mandates INEC to electronically transmit election results from polling stations to INEC’s IReV portal.

The electoral commission’s failure to electronically transmit the presidential election results in real-time from the polling units across Nigeria forms one of the grounds upon which Atiku and other petitioners are challenging Tinubu’s victory.

Under cross examination by Tinubu’s counsel, Akin Olujinmi, Melaye said that the failure of INEC to transmit results from Form EC8As to its IReV was an infringement of the law.

He, however, said that the result captured in Form EC8A could not be changed even where it was not transmitted electronically.

The witness further told the court that as a contributor to the drafting of the Electoral Act, the conduct of the presidential election was not done according to the law.

He said electronic transmission of results from the polling units unto the IReV was a very important aspect of the election process, adding that without that, the election circle could not be said to have been completed.

“Result is transmitted from polling units before you move to the ward collation center,” the PDP stalwart said.

He said his depositions in his statements were based on his personal experience at the national collation centre and information from the party agents across the country who reported to him as the national collation agent of the party.

He also said that some of the reports given by the agents were live feeds of what was happening at their locations real time through the use of technology.

When asked to give the actual scores of Atiku in the election since he claimed the scores were wrongly computed, the witness said that he did not calculate them directly but that they were calculated through his statistician.

The five-member panel led by Haruna Tsammani then discharged Melaye from the witness box after all the respondents had questioned him.

Exhibits tendered

The petitioners also tendered two sets of documents acquired from IReV via a subpoena issued on May 26 at Friday’s proceeding.

The documents are the certified true copies of Forms EC8A series from 13 local government areas of Nasarawa.

The second set of documents are Forms EC40G and Form EC40G(2), which were summaries of polling units where elections were cancelled or disrupted.

All the respondents objected to the admissibility of the documents saying they would advance reasons for their objection at the final address stage.

The documents were, however, admitted in evidence.

The court subsequently adjourned proceedings until 19 June.

Labour Party’s Peter Obi and the Allied Peoples Movement (APM) also filed separate petitions to challenge the victory of Tinubu.

A federal capital territory  (FCT) high court sitting in Maitama has ordered the Department of State Services (DSS) to allow Godwin Emefiele, suspended governor of the Central Bank of Nigeria (CBN), to have access to his lawyers and family.

Hamza Muazu, presiding judge, gave the order on Friday after an application by Joseph Daudu, counsel to Emefiele.

On June 9, President Bola Tinubu suspended Emefiele and asked him to transfer his responsibilities to Folashodun Adebisi Shonubi, deputy governor, operations directorate.

On Saturday, the DSS announced that Emefiele was in its custody for “some investigative reasons”.

Responding, I. Awo, counsel to the DSS, said the service was not in the habit of rejecting such requests, adding that it was inappropriate.

Awo gave assurance that the DSS would comply with the order of the court and allow the listed lawyers and family members to visit the suspended CBN governor.

The judge said allowing Emefiele access to his lawyers and family is within his fundamental rights.

Meanwhile, both the counsels to the DSS and the office of the attorney-general of the federation requested an extension of time to file their responses to the originating motion.

The court granted the request and adjourned the hearing of the substantive suit to June 19.

 

The National Judicial Council (NJC) has recommended the appointment of nine candidates to the Court of Appeal bench and 28 other judicial officers.

It said in a statement posted via its Twitter handle Friday that the council made the recommendations at its 102nd meeting, which was held between 14 and 15 June.

The statement signed by the council’s director of information, Soji Oye, said the meeting presided over by the Chief Justice of Nigeria (CJN) and chair of the council, Olukayode Ariwoola, made the recommendations after considering the report of its Interview Committee.

The report contained a list of 37 candidates recommended for various judicial positions.

They include nine nominees for the Court of Appeal bench and the Chief Judges of Kano, Edo, and Bayelsa states.

They also include candidates for President of the Customary Court of Appeal, Delta State; three judges of the Benue State High Court; five judges of the Delta State High Court; eight judges of the Edo State High Court; four judges of the Katsina State High Court.

The rest are a judge of the Customary Court of Appeal, Benue State, two judges of the Customary Court of Appeal, Delta State, and one judge of the Customary Court of Appeal, Ogun State.

Nine of the nominees, who are for the Court of Appeal bench, were recommended to President Bola Tinubu for validation.

The rest of the candidates for positions of heads of courts and judges of the High Court and Customary Courts of Appeal were recommended to the relevant state governors.

The full list of 37 recommended candidates is as follows:

1. NINE (9) JUSTICES, COURT OF APPEAL

i. Asma’u Musa Mainoma

ii. Paul Ahmed Bassi

iii. Hannatu Azumi Laja-Balogun

iv. Binta Fatima Zubair

v. Hadiza Rabiu Shagari

vi. Peter Chudi Obiora

vii. Okon Efreti Abang

viii. Jane Esienanwan Inyang

ix. Lateef Adebayo Ganiyu

 

2. CHIEF JUDGE, KANO STATE HIGH COURT

i) Dije Abdu Aboki

 

3. CHIEF JUDGE, EDO STATE HIGH COURT

i) Daniel Iyobosa Okungbowa

 

4. CHIEF JUDGE, BAYELSA STATE HIGH COURT

i) Matilda Abrakasa Ayemieye

 

5. PRESIDENT, CUSTOMARY COURT OF APPEAL, DELTA STATE

i) Catherine Ngozi Ojugbana-Orishedere

 

6. THREE (3) JUDGES, BENUE STATE HIGH COURT

i) Lilian Ngusuur Terseer-Tsumba

ii) Patrick Eka Oche

iii) Ukande Mvendaga Peter

 

7. FIVE (5) JUDGES, DELTA STATE HIGH COURT

i) Ossai Rita Ngozi

ii) Aforkeya Obomejero

iii) Adolor Sunny Onorieukuhakpo

iv) Samuel Ifeanyi Okeleke

v) Umuko Aboyowa Godwin

 

8. EIGHT (8) JUDGES, EDO STATE HIGH COURT

i) Ovenseri Otamere

ii) Obayuwana Osarenren Mathias

iii) Edoghogho Eboigbe

iv) Ojo Maureen Osa

v) Bright Eraze Oniha

vi) Ehinon Anthony Okoh

vii) Godwin Jeff Okundamiya

viii) Osayande Ikwuemosi Awawu

 

9. FOUR (4) JUDGES, KATSINA STATE HIGH COURT

i) Nuradeen Abdulmumeen

ii) Halima Lawal Bagiwa

iii) Abdullahi Bara’u Faskari

iv) Sanusi Ma’aruf Aminu

 

10. ONE (1) JUDGE, CUSTOMARY COURT OF APPEAL, BENUE STATE

i) Iortyer Vihilun Fidelis

 

11. TWO (2) JUDGES, CUSTOMARY COURT OF APPEAL, DELTA STATE

i) Gbakeji Michael Emakpor

ii) Uraih Tracy Patricia Ifeanyi

 

12. ONE (1) JUDGE, CUSTOMARY COURT OF APPEAL, OGUN APPEAL

Sofowora Oriyomi Abiodun

 

 

 

 

 

 

 

 

 

 

The police command in Sokoto State on Sunday confirmed the death of 30 persons during an attack launched by a group of armed men in Tangaza Local Government Area of the state, according to the News Agency of Nigeria, NAN. 

A statement issued by ASP Ahmad Rufai, the acting spokesman of the command, revealed that the gunmen attacked Raka, Bilingawa, Raka Dutse, Jaba, Dabagi and Tsalewa villages of the LGA on Saturday.

According to Mr Rufai, prior to the attack, some vigilante group members had gone to Azam village to warn the Fulani community there.

“However, the vigilante members overreacted and ended up beating some villagers who are a predominantly Fulani tribe.

“Consequently, the villagers called for assistance, and unfortunately, the assistance came from armed men suspected to be bandits on board 20 motorcycles.

“On getting the information that assistance is coming, the vigilantes withdrew to their various villages,” he said.

The spokesman added that the armed men immediately went after the vigilante members and killed eight in Raka, seven in Bilingawa, six in Jaba, four in Dabagi, three in Raka Dutse and two in Tsalewa Villages.

He further said the attackers set two vehicles ablaze and six huts, while one Bajaj motorcycle, strongly believed to be that of the armed men, was recovered at the scene.

The spokesman also confirmed another attack on Saturday by suspected bandits on some villages in Gwadabawa LGA, eastern part of Sokoto state.

 

 

Presidential Elections Petitions Tribunal in Abuja will today hold an inaugural sitting on the petitions filed by candidates of five political parties challenging the February 25 presidential election.

Officials at the Court of Appeal headquarters in Abuja had last week announced that the inaugural session by the president of the court, Monica Dongban-Mensem, will form part of the pre-hearing session of the court.

The pre-hearing session features issues such as amendment of writs, and motions, correction of typos, aligning of main issues in the petitions and outlining the hearing modalities and procedures.

Barring any last-minute change, the tribunal panel will comprise Haruna Tsammani, Stephen Adah, B.M. Ugo, Bolaji Yusuf and A.B. Muhammed.

Peoples Democratic Party (PDP) and its presidential candidate, Atiku Abubakar; Labour Party (LP) and its presidential candidate, Peter Obi; Action Alliance (AA)’s Solomon Okangbuan; Action Peoples Party (APP)’s Nnamdi Osita and the Allied Peoples Movement (APM)’s Chichi Ojei are those with petitions challenging the declaration of the APC’s Bola Tinubu as winner of the election.

Under Section 239 of the Nigerian Constitution, 1999, the Court of Appeal has been conferred with the original jurisdiction to determine questions as to the validity of the election of the president and vice president.

Section 132(8) of the Electoral Act, 2022, says the tribunal, which was activated in March with the approval of orders for the inspection of election materials by Atiku and Obi, will conclude the sitting within 180 days, while any further appeal will take 60 days.

Independent National Electoral Commission (INEC) declared Tinubu the winner of the elections with 8,794,726 votes, Atiku second with 6,984,520 votes, and Obi third with 6,101,533 votes.

Atiku demands live transmission

Presidential candidate of the PDP, Atiku Abubakar, has asked the Presidential Election Petition Tribunal in Abuja to grant access to the live transmission of the proceedings.

Atiku and the PDP brought the application on May 5 seeking “An order directing the court’s registry and the parties on modalities for admission of media practitioners and their equipment into the courtroom.”

The application filed on their behalf by their legal team led by Chris Uche is predicated among other grounds that the disputed election is of national and public interest, especially voters in the 36 states and the FCT.

The application is coming at a time various organisations and prominent citizens are making similar calls for live broadcasts of the tribunal proceedings.

Among those making the call is from the President of the Nigerian Bar Association (NBA), Yakubu Maikyau, at the NBA’s National Executive Committee meeting in Birnin Kebbi on March 23, and the Project Nigeria Movement (PNM).

PDP, APC trade words over plot to compromise judges

Meanwhile, PDP and the ruling APC have traded tackles over alleged plots to compromise tribunal judges.

Addressing a press conference yesterday in Abuja Debo Ologunagba, the national publicity secretary of the PDP alleged there were “shocking revelations, reports and allegations of plots by the APC to influence the outcome of the presidential election petition currently before the tribunal.

“The alleged planned onslaught by APC leaders on eminent Nigerians and our democratic institutions, including the judiciary, stems from APC’s apprehensions given the weight of evidence against it as well as the continuing refusal by the majority of Nigerians to accept the outcome of the flawed presidential election,” Ologunaba said.

But in a swift reaction, chief spokesman of the APC Presidential Campaign Council for the March 25 poll, Festus Keyamo, described the allegations as cheap blackmail.

Keyamo said, “The allegations are infantile, lacking in substance and devoid of proof. Nigerians should dismiss them with a wave of the hand, please.

“PDP and its sister company, the LP have been the ones sponsoring surrogates to ‘speak out’ against the outcome of the largely free and fair 2023 presidential election when their cases are still pending in court. That is contempt of court and we are within our rights to correct the wrong impressions about the elections being created before Nigerians and the international community.”

In a related development, there have been requests for the transfer of governorship election petition tribunals of Ebonyi, Enugu, Rivers and Taraba states to Abuja.

Although the request by the PDP for the transfer of Ebonyi’s tribunal was approved over security concerns, other political parties are still challenging it.

 

 

 

 

Last modified on Monday, 08 May 2023 08:09

Over 40 percent of deposits in local banks are now in United States (U.S.) dollars, the International Monetary Fund (IMF) has said.

It blamed the trend of saving in hard currency on rising inflation and exchange rate volatility.

The IMF described the practice as a confirmation of loss of confidence in the local currency, adding that “it is usually difficult to reverse”.

According to the IMF, market participants defend their wealth by shifting to dollar savings under high and persistent inflation.

In its Report on dollar savings, the Fund said “Nigeria operates with dollar bias for international trade, finance invoicing and of recent, store of value. Over 40 per cent of Nigeria’s bank deposits are in dollars”.

The IMF said the process of reversing citizens savings in dollars could be complex even after addressing the initial trigger, such as high inflation and exchange rate volatility.

The use of dollars for storing value worsened in the country following the implementation of the naira redesign policy and issuance of new banknotes by the Central Bank of Nigeria (CBN).

Under the policy, the CBN introduced new 1,000, 500 and 200 naira denominations and withdrew the old notes from circulation.

But a March 3 Supreme Court verdict on a suit spearheaded by Kaduna, Kogi and Zamfara state governments forced the CBN to reintroduce the rested notes.

In its judgment, the apex court directed the CBN and the Federal Government to allow the old and the new naira notes to co-exist till December 31.

Analysts said the redesigning of the bank notes could inadvertently lead to the dollarisation of the domestic economy.

The IMF said most economies operate with a foreign exchange (FX) – the dollar bias for international trade and finance invoicing.

“The optimal choice between domestic currency versus dollars  will depend on the monetary framework and the benefits that each may offer as they co-exist as two currencies,” it said.

The IMF explained that in a highly dollarised economy, there is extended use of the exchange rate for price indexation (high real dollarisation and almost complete pass-through from depreciation to inflation). Forex is also used in foreign trade.

It said: “There is limited scope for fiat currency (tax payments, public expenditure, non- durable goods, and low- value transactions; extended forex use for durable goods, real estate, capital goods, and high-value transactions. Also, forex takes over the role of store of value as lending capacity in domestic currency becomes limited. Most loans become forex- denominated when forex bank deposits are allowed.”

The Fund said banking systems in many developing economies are bi-monetary while the  U.S. enjoys a privileged status as issuer of the most widely used international currency.

It said a bi-monetary system embodies the failure to conduct monetary policy in an effective way, such as, secure price stability, efficient payment systems, and well-functioning financial markets (including long-run financial contracts at comparatively low nominal interest rates).

“The most common type of dollarisation is financial dollarisation (FD), or asset substitution, caused by a poor performance of the local currency.

“The local currency is used more for payment transactions but is replaced by the dollar as saving asset or store of value, in line with Gresham’s law.”

Under extremely high inflation, such as in Venezuela or Zimbabwe, real dollarization (RD) – i.e., use of the dollar as means of payment transactions and store of value -also takes place.

It said: “On the one hand, in some countries dollarisation is entrenched and a bi-monetary system is formally allowed (e.g., Uruguay). On the other hand, in other countries it is not allowed, or dollar accounts are restricted. Under high inflation (e.g., Argentina or the Democratic Republic of the Congo), the public holds a large share of financial assets abroad and local financial intermediation is low.

“Countries with no history of extreme high inflation (e.g., Malaysia) impose restrictions on dollar deposits, but there seems to be no significant impact on local financial intermediation.”

The IMF said a bi-monetary system limits the role of the exchange rate as a shock absorber, as real dollarization implies a high pass-through from exchange rate depreciation to inflation.

It said: “Financial dollarlisation creates currency mismatches and liquidity risks for the financial system and the economy as a whole. Therefore, the exchange rate amplifies negative external shocks rather than absorbing them.

“Both financial dollarization and real dollarisation jeopardize monetary transmission mechanisms, as inflation expectations are difficult to anchor with a weak interest rate channel.

“Financial dollarisation-related financial instability would need to be addressed via policy responses such as a central bank forex reserve buildup and associated regulation.”