The Nigerian Senate on Thursday unanimously rejected the Foreign Exchange (Control And Monitoring) Bill, 2024 (SB. 353), which sought to control and monitor the foreign exchange market in the country.
The bill, sponsored by Senator Sani Musa representing Niger East, was first read in the Senate last February. It aimed to control, monitor, and supervise transactions in the foreign exchange market.
Senator Musa, who is also the Chairman of the Senate Committee on Finance, argued that the bill would streamline foreign transactions and help maintain an equilibrium in the balance of international payments.
He stated, “The bill seeks to stabilize the value of the currency by ensuring the liberalization of foreign exchange transactions to maintain an equilibrium of balance of international payments. It will also stabilize the value of currency by ensuring the liberalization of foreign exchange transactions and other foreign transactions by revitalizing market functionality.”
The proposed bill sought to expand Section (1) of the existing Act by incorporating three new provisions to provide clarity and empower the Central Bank of Nigeria (CBN) to administer, control, and manage all foreign exchange dealings and transactions. According to Senator Musa, the new clauses would enable the CBN to determine the basic exchange rate for purchasing and selling foreign exchange.
Clause 6 of the bill proposed new sub-clauses (2), (4), and (5), which would require authorized dealers to report to the CBN any foreign exchange sources in excess of USD 10,000 and how they are utilized.
It also mandated that authorized dealers seek prior approval from the CBN when importing foreign currency notes.
Part III of the bill included provisions for granting licenses for foreign exchange business dealings.
These provisions covered the refusal of licenses, suspension or revocation of licenses, and processes for review and appeal. Clause 18 (1) (a) and (b) aimed to expand the scope of market dealers and the regulations for purchasing funds from the Bank.
Senator Musa believed that the proposed legislation would give the CBN the authority to dictate how foreign exchange could be used to pay for goods and services in Nigeria.
He expressed hope that it would contribute to the development of the national economy, facilitate foreign transactions, and stabilize the currency’s value.
However, many lawmakers expressed strong reservations about the proposed law, arguing that it could complicate the existing challenges faced by Nigerians in operating their domiciliary accounts and add to the regulation in the foreign exchange market.
Former Gombe State Governor and ex-Accountant General of the Federation, Ibrahim Dankwambo, cautioned that the bill might create more confusion in the foreign exchange market if passed. He also suggested that such a bill should be an executive initiative from the Presidency.
Senator Adams Oshiomhole, representing Edo North, called for caution, noting that passing the legislation without considering the apex bank and the executive branch could be counterproductive.
He emphasized, “We have to be careful because we cannot speculate. Anything done in this house, Nigerians will take it very seriously, because we have the power to make laws. Senators who have spoken have summarized and amplified meticulously the contradictions and negative implications of passing the law. I believe that the bill should not attract further hearing because we are trying to take over the monetary policy regulations of the CBN if we go ahead with it. If the executive arm of government likes, let them bring a bill to further strengthen the regulatory powers of the CBN. It is not our work.”
The President of the Senate, Godswill Akpabio, called for a voice vote to decide the bill’s fate for second reading, and the majority of the lawmakers voted against it.
