Senate Proposes Foreign Currency Ban For Local Transactions

The Senate approved a bill on Tuesday to prohibit the use of foreign currencies in Nigerian transactions and payments in its first reading.

The proposed legislation, aimed at ensuring all payments, including salaries and transactions, are conducted in naira, seeks to eliminate discriminatory practices and strengthen confidence in the local currency.

This includes making it mandatory for exports to be paid for in naira.

The bill was 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.”

It was sponsored by Senator Ned Nwoko, who is the chairman of the Senate Committee on Reparations and Repatriation.

According to Senator Nwoko, the widespread use of foreign currencies in Nigeria’s financial system undermines the value of the naira, perpetuating economic challenges.

He described the use of the dollar, pound sterling, and other foreign currencies for domestic transactions as a colonial relic that continues to hinder Nigeria’s economic independence.

He also proposed that “crude oil and other exports to be sold exclusively in naira, compelling international buyers to purchase the currency and driving its demand and value.”

He argues that the law will “position the Naira as the central currency for all financial operations, reinforcing its dominance in the economy.”

Nwoko added that the bill will abolish informal currency markets that undermine the formal economy and encourage unethical practices such as round-tripping by banks.