Senate Mulls Law To Prohibit Use Of Foreign Currencies In Nigeria

The Senate has taken a significant step toward restoring the country’s monetary sovereignty by proposing a law to prohibit the use of foreign currencies for payments and transactions within Nigeria.

The Bill, which passed its First Reading on Tuesday, was aimed at reinforcing the dominance of the Naira, fostering economic growth, and strengthening confidence in the local currency.

Titled “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,” the proposed law was sponsored by Senator Ned Munir Nwoko, chairman of the Senate Committee on Reparations and Repatriation.

Senator Nwoko emphasised that the widespread use of foreign currencies like the US Dollar and British Pound Sterling for domestic transactions undermines the value of the Naira. Describing the practice as “a colonial relic,” he argued that it perpetuates economic dependency and challenges.

“The use of the Dollar, Pound Sterling, and other foreign currencies for domestic transactions continues to hinder Nigeria’s economic independence,” Senator Nwoko stated.

The Bill outlined several key provisions such as Salaries, payments, and all domestic financial operations—including for expatriates—must be conducted in Naira, Crude oil and other exports would be sold exclusively in the Naira denomination, compelling international buyers to purchase Nigeria’s currency, thereby driving demand and strengthening its value.

The Bill also sought to abolish informal forex markets that undermine the formal economy, addressing unethical practices like currency round-tripping by banks. Banks would be mandated to offer loans at accessible interest rates to stimulate local manufacturing, reduce imports, and boost industrialization, it also said Nigeria’s foreign reserves would be stored domestically to reduce exposure to global economic vulnerabilities.

Senator Nwoko underscored the broader impact of the legislation on Nigeria’s economic independence and resilience.

“This bill is about reclaiming our monetary independence and fostering national pride by prioritizing the Naira for domestic and international transactions,” he said.

The lawmaker drew comparisons with Morocco, highlighting the stability of the Moroccan Dirham, which has maintained consistent value for over three decades due to policies promoting its exclusive use for domestic transactions.

“Nigeria, with its vast natural resources and dynamic population, has the potential to achieve and surpass Morocco’s success,” Nwoko argued, adding that a paradigm shift in the perception and use of the Naira is essential.

To address public concerns, Senator Nwoko clarified that transitioning domiciliary account balances into Naira would remain a voluntary process. He noted that as the Naira strengthens, the reliance on foreign currencies would naturally decline.

“Access to foreign exchange for legitimate purposes such as travel will be streamlined through banking reforms, ensuring easier access to Basic Travel Allowance (BTA) and other forex needs,” he assured Nigerians.

The bill also envisioned a future where Nigerian banks expand internationally, providing innovative financial tools such as cashless wallets to facilitate global transactions. These measures, Nwoko explained, would address existing challenges, such as the inability of Nigerian debit cards to complete international online payments, while reducing the need for domiciliary accounts.

If passed into law, the bill is expected to drive transformative economic growth, boost the value of the Naira, and promote cultural pride.

“This is not just about policy; it is about building a resilient economy anchored in the strength of our currency,” Senator Nwoko concluded.