A bill introduced in the Nigerian Senate, which has successfully undergone its first reading, proposes to amend existing laws to ban the use of foreign currencies in transactions and payments within Nigeria’s borders.
The bill seeks to outlaw the use of foreign currencies for payments and transactions within the country.
The bill, which is 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, who is the Chairman of the Senate Committee on Reparations and Repatriation.
He posits that if passed, the bill will position the Naira as the central currency for all financial operations, reinforcing its dominance in the economy.
The proposed legislation, proposed that all payments including salaries and transactions are made using the country’s currency – Naira.
The sponsor of the bill contends that its passage will eradicate discriminatory practices and bolster confidence in the Nigerian Naira.
This includes making it mandatory for exports to be paid for in Naira.
According to Senator Nwoko, the widespread use of foreign currencies in Nigeria’s financial system undermines the value of the Naira, perpetuating economic challenges.
Nwoko described the use of the Dollar, Pound Sterling, and other foreign currencies for domestic transactions as a “colonial relic that continues to hinder Nigeria’s economic independence.”
Other aims of the bill include prohibiting salaries, transactions, and payments in foreign currencies, which ensures that all workers, including expatriates, are paid in Naira.
The bill also proposes that crude oil and other exports will be sold exclusively in Naira, compelling international buyers to purchase the currency, which is expected to drive its demand and value.
Other proposals in the bill include the abolishment of informal currency markets that undermine the formal economy and encourage unethical practices such as round-tripping by banks.
The bill also advocates for storing Nigeria’s foreign reserves domestically to safeguard the country’s economic sovereignty and reduce exposure to external vulnerabilities.
