The Senate on Thursday, July 11, threw out a Bill that seeks the establishment of a foreign exchange market in Nigeria.
The Bill titled: “The Foreign Exchange (Control and Monitoring) Bill, 2024” was sponsored by the Chairman of the Senate Committee on Finance, Senator Sani Musa (APC -Niger East).
It was read for the first time on Tuesday, February 20, 2024.
The Bill also sought to make provisions for the control, monitoring and supervision of transactions conducted in the Foreign Exchange Market.
In his lead debate, Senator Musa described the bill as important legislation seeking to repeal the Foreign Exchange (Monitoring and Miscellaneous Provision) Act, Cap. F34, Laws of the Federation of Nigeria, 2004.
He stated that when passed into law, it ensures the regulation, monitoring and supervision of the transactions conducted in the FOREX market and for related matters.
He said it would also contribute to the sound development of the economy by facilitating foreign transactions and maintaining an equilibrium of balance of International payments.
Musa said: “The Bill seeks to stabilize the value of the currency by ensuring the liberalization of foreign exchange transactions to maintain an equilibrium of the balance of International payments.
“It will also stabilise the value of the currency by ensuring the liberalization of foreign exchange transactions and other foreign transactions by revitalizing 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 in relation to 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 further said that the proposed law would ensure that the operation of the domiciliary account shall be as prescribed by the Bank and that the powers of the CBN have been widened to prescribe how foreign exchange may be accepted for the payment of goods and services in Nigeria.
He said the planned legislation would contribute to the sound development of the national economy, facilitate foreign transactions and most importantly, stabilize the value of the currency by ensuring the liberalization of foreign transactions and revitalizing market functionality.
Some Senators in their contributions expressed misgivings noting that fresh legislation seeking to monitor or control the activities of the foreign exchange market apart from what the CBN is already doing, would be counterproductive.
Some of the senators who expressed serious reservations over the proposed law are, Solomon Adeola (Appropriation Committee Chairman); Tokunbo Abiru (Chairman, Banking, Insurance and Other Financial Institutions panel; and Aliyu Wadada (Chairman, Senate Public Account Committee) among others
For instance, a former Accountant General of the Federation who is now the senator representing Gombe North, Ibrahim Dankwambo, noted that the law, if passed, would confuse Nigerians.
He was of the view that any further law aimed at regulating the foreign exchange market should come from the executive arm of government to avoid a crisis in the sector.
Senator Adams Oshiomhole, on his part, 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 summarized 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 Senate President, Senator Godswill Akpabio in his contribution, urged Senator Musa to withdraw the Bill for further consultations but the senator refused to do so.
Akpabio thereafter called for a voice vote to approve it for a second or reject it and the majority of the Senators voted against it.
