The Senate, on Tuesday, passed the first reading of a bill seeking to ban the use of foreign currencies for payments and transactions within Nigeria.
The bill aims to ensure that all financial transactions, including salaries, are conducted exclusively in naira. It also proposes that exports be paid for in the local currency, intending to strengthen confidence in the naira and eliminate discriminatory practices against it.
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 Other Related Matters,” the proposed legislation was sponsored by Senator Ned Nwoko, Chairman of the Senate Committee on Reparations and Repatriation.
Senator Nwoko explained that the extensive use of foreign currencies in Nigeria undermines the value of the naira and perpetuates economic challenges. He described the practice of using the dollar, Pound Sterling and other foreign currencies for domestic transactions as a colonial legacy that continues to obstruct Nigeria’s economic independence.
The bill, according to Nwoko, seeks to prohibit the payment of salaries and other transactions in foreign currencies, including for expatriates working in Nigeria. It further proposes that crude oil and other exports be sold exclusively in naira, requiring international buyers to purchase the currency, thereby boosting its demand and value.
Senator Nwoko believes this legislation will position the naira as the core currency for all financial activities in the country, reinforcing its importance in the economy.
Additionally, the bill aims to dismantle informal currency markets that undermine the formal financial system and encourage unethical practices, such as round tripping by banks.