Senate Suggests Ban on Foreign Currency for Local Transactions

A bill to prohibit the use of foreign currencies for payments and transactions within Nigeria was approved by the Senate on Tuesday in its first reading.

The proposed law aims to end discriminatory practices and boost trust in the local currency by requiring that all payments, including salaries and transactions, be made in naira.

This involves requiring that export payments be made in naira.

“A Bill to amend the Central Bank of Nigeria Act, 2007, No. 7, to prohibit the use of foreign currencies for compensation and for other related matters” was the title of the bill.

The Senate Committee on Reparations and Repatriation is chaired by Senator Ned Nwoko, who sponsored it.

Senator Nwoko claims that Nigeria’s financial system’s extensive usage of foreign currencies devalues the naira and prolongs the country’s economic problems.

He said Nigeria’s economic independence is still hampered by the colonial practice of using the dollar, pound sterling, and other foreign currencies for domestic operations.

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“Prohibit salaries, transactions, and payments in foreign currencies, ensuring all workers, including expatriates, are paid in naira,” he added, was the goal of the measure.

Additionally, he suggested “selling crude oil and other exports only in naira, which would compel foreign buyers to buy the currency and increase its demand and value.”

The Naira will be “positioned as the central currency for all financial operations, reinforcing its dominance in the economy,” according to his argument.

Nwoko went on to say that the bill will outlaw black markets for currency, which threaten the official economy and promote unethical behavior like banks round-tripping.