The Senate has advanced efforts to strengthen Nigeria’s monetary sovereignty by introducing a bill to prohibit the use of foreign currencies for payments and transactions within the country.
The proposed legislation, 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,” passed its First Reading on Tuesday. Sponsored by Senator Ned Munir Nwoko, chairman of the Senate Committee on Reparations and Repatriation, the bill seeks to reinforce the Naira’s dominance, stimulate economic growth, and bolster public confidence in the local currency.
Senator Nwoko criticized the use of foreign currencies like the US Dollar and British Pound Sterling for domestic transactions, describing it as a “colonial relic” that undermines the Naira’s value and perpetuates economic dependency.
“The use of the Dollar, Pound Sterling, and other foreign currencies for domestic transactions continues to hinder Nigeria’s economic independence,” Senator Nwoko said.
Key Provisions of the Bill
- Mandatory Use of the Naira: Salaries, payments, and domestic financial operations including expatriate salaries must be conducted in Naira.
- Export Transactions in Naira: Crude oil and other exports would be sold exclusively in the Naira, compelling international buyers to purchase Nigeria’s currency, thereby increasing its demand and value.
- Formalizing Forex Markets: The bill seeks to eliminate informal forex markets, curb unethical practices like currency round-tripping, and strengthen the formal economy.
- Accessible Loans for Industrialization: Banks would be required to offer loans at affordable rates to stimulate local manufacturing and reduce reliance on imports.
- Domestic Foreign Reserves: Nigeria’s foreign reserves would be stored locally, reducing exposure to global economic vulnerabilities.
Senator Nwoko drew inspiration from Morocco, citing the stability of the Moroccan Dirham as a model. “With its vast natural resources and dynamic population, Nigeria has the potential to surpass Morocco’s success,” he stated.
To address public concerns, Nwoko assured that converting domiciliary account balances to Naira would remain voluntary. He added that as the Naira strengthens, reliance on foreign currencies would diminish naturally.
The bill also envisions reforms to streamline access to foreign exchange for travel and other legitimate needs. It proposes expanding Nigerian banks’ international presence and providing tools like cashless wallets to facilitate global transactions, addressing issues such as the inability of Nigerian debit cards to complete international payments.
“This is not just about policy; it is about building a resilient economy anchored in the strength of our currency,” Senator Nwoko concluded.
If passed into law, the bill is expected to transform the economy, enhance the Naira’s value, and foster cultural and economic pride.