The Nigerian Senate rejected a bill that aimed to create a foreign exchange market in the country.
The bill, sponsored by Senator Sani Musa (APC-Niger East), the chairman of the Senate committee on finance, also aims to establish regulations for the management, oversight, and supervision of transactions carried out in the foreign exchange market.
ThisDay reported that the bill, titled “the Foreign Exchange (Control and Monitoring) Bill, 2024 (SB. 353),” was read aloud for the first time on Tuesday, February 20, 2024.
According to Musa, the proposed law would include similar subjects in addition to regulating, monitoring, and supervising market activity.
He claimed that attempting to maintain an equilibrium in the balance of foreign payments and speeding up international transactions would also contribute to the healthy growth of the national economy.
He said:
He added that the recently inserted terms will allow the CBN to ascertain the fundamental exchange rate for purchasing and selling foreign exchange.
He pointed out that the bill’s clause 6 adds new subclauses (2), (4), and (5), which mandate that authorised dealers report to the CBN the sources and uses of foreign exchange exceeding USD 10,000.
He added:
Musa added that the bill stipulates that the domiciliary account must be operated in accordance with the bank’s guidelines and that the CBN now has more authority to specify how foreign exchange may be used to pay for goods and services in Nigeria.
Musa claims that if the bill is signed into law, it will support the healthy growth of the national economy, make international trade easier, and—above all—stabilize the value of the currency by guaranteeing the liberalization of international trade and reviving market efficiency.
But reacting, majority of the senators conveyed their concerns that any legislation aimed at overseeing or managing the foreign currency market’s operations beyond the scope of the CBN’s work would backfire.
The house rejected Senate President Godswill Akpabio’s request that Musa withdraw the proposed legislation so that more discussions could take place.
The majority of federal MPs voted against Akpabio’s request for a voice vote to decide whether to approve or reject it for a second reading.
TimesNow.com.ng earlier reported that the demand for foreign exchange by individuals and companies engaged in importation and other forex-related activities decreased by 42% year-on-year.
The total sectoral utilisation of foreign exchange indicated that 19 sectors and services received $21.12 billion in forex allocations in 2023.
This represented a 41.9% decline, or $8.87 billion, compared to the $29.98 billion allocated in 2022.
Proofreading by James Ojo Adakole, journalist and copy editor at TimesNow.com.ng.
Source: TimesNow.com.ng
