Senate Moves To End Foreign Currency For Transactions

 

The Nigerian Senate has taken a decisive step towards banning the use of foreign currencies for domestic payments and transactions in the country, as a bill to that effect passed its first reading on the floor of the upper legislative chamber.

The bill, titled “A Bill for an Act to Alter the Central Bank of Nigeria Act, 2007, No. 7, to Prohibit the Use of Foreign Currencies for Remuneration and for Other Related Matters”, was sponsored by Senator Ned Munir Nwoko, Chairman of the Senate Committee on Reparations and Repatriation.

Speaking on the proposed legislation, Senator Nwoko described the widespread use of foreign currencies such as the Dollar and Pound Sterling in Nigeria as a colonial relic that continues to undermine the value of the Naira and weaken the nation’s economic sovereignty.

“The use of the Dollar, Pound Sterling, and other foreign currencies for domestic transactions is a colonial relic that continues to hinder Nigeria’s economic independence,” Nwoko said.

The bill proposes that all salaries, including those of expatriates, must be paid in Naira, while mandating the use of the Naira for all export transactions.

According to Nwoko, this move would increase demand for the Naira internationally, which in turn would bolster its value against foreign currencies.

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He further stated that the legislation aims to address unethical practices in the informal currency market, strengthen industrial growth by providing affordable loans, and safeguard Nigeria’s monetary sovereignty.

Addressing concerns about domiciliary accounts, Senator Nwoko clarified that the transition to Naira would not be enforced, as account holders would be allowed to make the switch voluntarily.

He, however, added that as the Naira strengthens, Nigerians would naturally see less need to hold foreign currencies.

“As the Naira strengthens, the need to hold foreign currencies would diminish, making the transition seamless,” Nwoko assured.

Nwoko also sought to allay fears over access to foreign exchange for essential needs, including travel and medical expenses.

He noted that banking reforms under the proposed legislation would streamline access to forex for legitimate purposes, ensuring availability of Basic Travel Allowance (BTA) and other foreign exchange needs.

The Senator cited Morocco as an example, stating that the Moroccan Dirham has maintained stability against major currencies for over 35 years.

He expressed confidence that with Nigeria’s vast resources and growing population, the country has the potential to replicate and surpass Morocco’s achievements.

“With Nigeria’s vast resources and vibrant population, we have the potential to surpass Morocco’s achievements, but only if we embrace a paradigm shift in how we use and perceive the Naira,” he added.

The bill also aims to address challenges faced by Nigerians in online transactions, particularly the inability of many debit cards to facilitate international payments.

Senator Nwoko envisioned a future where Nigerian banks expand globally, offering innovative financial tools to simplify international transactions.

If enacted, the bill is expected to mark the beginning of a transformative era for Nigeria’s economy, fostering cultural pride, sustainable development, and renewed confidence in the Naira.

The proposed legislation has already generated discussions among stakeholders, with some expressing optimism about its potential to reduce the dominance of foreign currencies, while others have raised concerns about its implementation and possible effects on businesses that rely heavily on foreign exchange.