Senate rejects bill to control, monitor forex market in Nigeria

The Senate on Thursday unanimously rejected a bill which seeks to control and monitor a foreign exchange market in the country.

The bill, Foreign Exchange (Control And Monitoring) Bill, 2024 (SB. 353), was sponsored by the Senator representing Niger East, Sani Musa.

Checks revealed that it was first read on the floor of the Red Chamber last February. The proposed legislation also seeks to make provisions for controlling, monitoring and supervising transactions conducted in the foreign exchange market.

Senator Musa who incidentally is the Chairman, Senate Committee on Finance in his Lead Debate said if passed into law, it would help to streamline foreign transactions and maintain an equilibrium of the balance of international payments.

He said, “The bill seeks to stabilise the value of the currency by ensuring the liberalisation of foreign exchange transactions to maintain an equilibrium of balance of International payments.

“It will also stabilise the value of currency by ensuring the liberalisation of foreign exchange transactions and of other foreign transactions by revitalising market functionality.

“The bill attempts to expand Section (1) of the existing Act to incorporate three new provisions to make for clarity and to empower the Central Bank of Nigeria to administer, control and manage all dealings and transactions about foreign exchange matters.

“The newly introduced clauses will enable the CBN to determine the basic exchange rate of purchase and sale of foreign exchange.

“Clause 6 of the Bill introduces New Sub-clauses (2), (4) and (5) which require authorised dealers to render returns to the CBN on sources of foreign exchange in excess of USD 10,000 and utilisation of same.

“It also requires authorized dealers to obtain prior approval of the CBN when seeking to import foreign currency notes.

“Part Ill of the Bill makes elaborate provisions for the grant of a licence to carry on business dealings in foreign exchange. In this part, provisions were made for refusal of licence, suspension or revocation of licence, review and appeal.

“Clause 18 (1) (a) and (b) were added to expand the scope of dealers in the market and where funds are purchased from the Bank. The market rate may be subject to rules and regulations prescribed by the bank.”

Musa maintained that with the proposed legislation the apex bank, the Central Bank of Nigeria would be given the statutory leverage to prescribe how foreign exchange may be accepted for the payment of goods and services in the country.

He expressed the hope that it would contribute to the sound development of the national economy, facilitate foreign transactions and most importantly, stabilise the value of the currency by ensuring the liberalisation of foreign transactions and revitalising market functionality.

Individual lawmakers however expressed strong reservations about the proposed law as they submitted that it would complicate the challenge being faced by Nigerians in the operations of their domiciliary account as it seemed to add to the regulation in the foreign exchange market.

Two-term Gombe State Governor and former Accountant General of the Federation, Ibrahim Dankwambo, cautioned that if passed into law it create more confusion in the foreign exchange market.

He also expressed the opinion that the proposed legislation should have been an initiative of the Presidency as an Executive Bill.

Senator representing Edo North, Comrade Adams Oshiomhole equally called for caution as he noted that passing such legislation without recourse to the apex bank and the executive could be counterproductive.

He said: “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 had summarised 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 determine the fate of the bill for second reading and the majority of the lawmakers voted against it.

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