Senate Mulls Law To Prohibit Use Of Foreign Currencies in Nigeria
The Nigerian Senate is advancing efforts to reclaim the nation’s monetary sovereignty by proposing a Bill to prohibit the use of foreign currencies for payments and transactions within the country.
The proposed legislation, which passed its First Reading on Tuesday, aims to reinforce the dominance of the Naira, boost economic growth, and enhance public confidence in the local currency.
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, the initiative is sponsored by Senator Ned Munir Nwoko, chairman of the Senate Committee on Reparations and Repatriation.
Senator Nwoko highlighted that the reliance on foreign currencies like the US Dollar and British Pound for domestic transactions erodes the value of the Naira and perpetuates economic dependence.
“The use of the Dollar, Pound Sterling, and other foreign currencies for domestic transactions is a colonial relic that undermines Nigeria’s economic independence,” he stated.
Key Provisions of the Bill
- Domestic Payments in Naira
All salaries, payments, and transactions—including those involving expatriates—must be conducted in Naira. - Exports Denominated in Naira
Crude oil and other exports will be sold exclusively in Naira, compelling international buyers to purchase Nigeria’s currency, thus driving demand and stabilizing its value. - Abolition of Informal Forex Markets
The Bill seeks to eliminate informal foreign exchange markets and curb unethical practices such as currency round-tripping by financial institutions. - Support for Industrial Growth
Banks will be mandated to provide accessible loans to stimulate local manufacturing, reduce imports, and encourage industrialization. - Domestic Storage of Reserves
Nigeria’s foreign reserves will be held domestically to minimize exposure to global economic risks.
Senator Nwoko drew parallels with Morocco, citing the Moroccan Dirham’s consistent value over three decades due to policies promoting its exclusive use for domestic transactions. “With its vast resources and dynamic population, Nigeria can not only replicate but exceed Morocco’s achievements,” he argued.
Addressing Public Concerns
The Senator clarified that transitioning domiciliary account balances to Naira would remain voluntary. He assured Nigerians that access to foreign exchange for legitimate needs, such as travel, would be streamlined through banking reforms to improve access to Basic Travel Allowance (BTA) and related services.
“The bill is about reclaiming monetary independence and fostering national pride by making the Naira central to all domestic and international transactions,” Nwoko emphasized.
Vision for the Future
The proposed legislation envisions Nigerian banks expanding internationally and introducing innovative financial solutions, such as cashless wallets, to facilitate seamless global transactions. By reducing reliance on foreign currencies, the bill seeks to address existing challenges, such as the difficulty in using Nigerian debit cards for international payments.
If passed, the Bill is expected to drive transformative economic growth, strengthen the Naira, and promote cultural pride.
“This is more than just policy. It’s about building a resilient economy anchored in the strength of our currency,” Senator Nwoko concluded.
