The Senate has turned down a proposed bill that aimed to bolster Nigeria’s external reserves through the use of gold. The bill, titled “Foreign Exchange (Control and Monitoring) Bill, 2024 (SB. 353),” was sponsored by Senator Sani Musa (APC, Niger East).
Senator Musa presented the bill for its first reading on February 20, 2024. The bill sought to repeal the existing Foreign Exchange (Monitoring and Miscellaneous Provision) Act, Cap. F34, Laws of the Federation of Nigeria, 2004. It aimed to establish a comprehensive foreign exchange market in Nigeria, encompassing control, monitoring, and supervision of transactions within the market.
The primary objectives of the bill included the establishment of a foreign exchange market, regulation, monitoring, and supervision of market transactions, and contributing to the sound development of Nigeria’s economy by facilitating foreign transactions and maintaining a balance in international payments.
Senator Musa highlighted that the bill would help stabilize the value of Nigeria’s currency by liberalizing foreign exchange transactions. It aimed to empower the Central Bank of Nigeria (CBN) to administer, control, and manage all dealings and transactions concerning foreign exchange matters.
Specific provisions within the bill included the introduction of new sub-clauses requiring authorized dealers to report foreign exchange sources over $10,000 to the CBN and to obtain prior approval when importing foreign currency notes. The bill also outlined detailed licensing provisions for conducting business dealings in foreign exchange, including clauses for license refusal, suspension, or revocation.
Despite these comprehensive measures, the bill faced significant opposition during debates in the Senate. Lawmakers expressed concerns about the practical implications of using gold to support external reserves and the potential impact on Nigeria’s economy. Consequently, the bill was rejected.
Senator Musa emphasized the importance of an efficient foreign exchange market for the health of Nigeria’s economy. He stated, “The future of any nation is tied to its ability to manage its economy efficiently. A well-regulated foreign exchange market is crucial for economic stability.”
