Senate Advocates Foreign Currency Prohibition for Local Transactions

Nigeria- The Senate passed a law prohibiting the use of foreign currencies for internal payments and transactions in Nigeria on Tuesday.

The new regulation, which aims to ensure that all payments, including salaries and transactions, be made in naira, attempts to eradicate discriminatory practices and boost trust in the local currency.

This includes mandating that exports be paid for in naira.

The measure's title was "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, Chairman of the Senate Committee on Reparations and Repatriation.

Senator Nwoko claims that Nigeria's financial system's extensive usage of foreign currencies devalues the naira and prolongs the country's economic problems.

He said Nigeria's economic independence is still hampered by the colonial practice of using the dollar, pound sterling, and other foreign currencies for domestic operations.

"Prohibit salaries, transactions, and payments in foreign currencies, ensuring all workers, including expatriates, are paid in naira," he added, was the goal of the measure.

Additionally, he suggested "selling crude oil and other exports only in naira, which would compel foreign buyers to buy the currency and increase its demand and value."

The Naira will be "positioned as the central currency for all financial operations, reinforcing its dominance in the economy," according to his argument.

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.