In a significant legislative decision, the Nigerian Senate on Thursday dismissed a proposed bill that aimed to overhaul the regulations governing the foreign exchange market in the country. The bill, titled “The Foreign Exchange (Control And Monitoring) Bill, 2024 (SB. 353),” was sponsored by Senator Sani Musa (APC Niger East), who also serves as the Chairman of the Senate Committee on Finance.
Senator Musa, in his lead debate, underscored the importance of the bill, which sought to repeal the existing Foreign Exchange (Monitoring and Miscellaneous Provision) Act, Cap. F34, Laws of the Federation of Nigeria, 2004. He argued that the new legislation would enhance the regulation, monitoring, and supervision of forex transactions, thereby contributing to the stability and growth of the national economy.
“The Bill aims to stabilize the value of the currency by ensuring the liberalization of foreign exchange transactions,” Musa stated. “It also strives to maintain an equilibrium in the balance of international payments and revitalizes market functionality.”
Key provisions of the proposed bill included granting the Central Bank of Nigeria (CBN) broader powers to manage all dealings related to foreign exchange, determining basic exchange rates, and requiring authorized dealers to report foreign exchange transactions exceeding $10,000. Additionally, the bill proposed new licensing requirements for businesses dealing in foreign exchange and expanded the scope of market regulation.
However, the bill faced substantial opposition from several senators. Concerns were raised about the potential redundancy and counter-productiveness of introducing new legislation beyond the current regulatory framework established by the CBN. Senator Solomon Adeola, Chairman of the Appropriation Committee, and Senator Tokunbo Abiru, Chairman of the Banking, Insurance, and other Financial Institutions panel, were among those who voiced their reservations.
Senator Ibrahim Dankwambo, a former Accountant General of the Federation, expressed apprehension that the new law could create confusion among Nigerians. He suggested that any further regulation of the foreign exchange market should originate from the executive branch to avoid potential crises.
Senator Adams Oshiomhole also cautioned against hasty legislative actions, emphasizing the importance of careful consideration given the serious implications of any new law on the market.
In light of these concerns, the Senate ultimately decided to reject the bill, opting to maintain the existing regulatory framework managed by the Central Bank of Nigeria.
This decision comes at a time when Nigeria’s foreign exchange market is experiencing volatility, with the naira recently depreciating against major currencies, including the British pound and the US dollar. The Senate’s rejection of the bill underscores the complexities involved in managing the country’s forex market and the cautious approach needed to ensure economic stability.
