The Nigerian Senate has moved forward with a bold proposal aimed at reclaiming the country’s monetary sovereignty by introducing a bill to ban the use of foreign currencies in domestic transactions.
The bill seeks to ensure that all payments within Nigeria, ranging from salaries to export proceeds, are conducted exclusively in the Naira, with the goal of boosting the local currency and promoting economic stability.
Senator Ned Munir Nwoko, Chairman of the Senate Committee on Reparations and Repatriation, is sponsoring the bill 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.” According to Nwoko, the ongoing use of the Dollar, Pound Sterling, and other foreign currencies in domestic transactions is undermining the Naira and perpetuating Nigeria’s economic dependence on external forces.
He described the continued reliance on foreign currencies as a “colonial hangover” that limits the nation’s financial independence. “The dominance of foreign currencies is eroding the value of the Naira and entrenching economic dependency,” Nwoko remarked, emphasizing that the proposed legislation is a step toward reclaiming Nigeria’s monetary sovereignty.
The bill outlines several key provisions designed to strengthen the Naira and foster economic independence:
- Mandatory Use of Naira for Salaries and Payments – The bill mandates that all workers, including expatriates, be paid exclusively in Naira, eliminating the payment of salaries in foreign currencies.
- Export Payments in Naira – The bill requires that payments for Nigeria’s exports, including crude oil, be made in Naira. This measure aims to increase demand for the Naira globally, as international buyers will need to purchase the currency for trade with Nigeria.
- Ban on Informal Currency Markets – The legislation seeks to curb informal currency markets, which have often promoted unethical practices like round-tripping, thereby stabilizing the nation’s formal financial system.
- Access to Loans at Low Interest Rates – Banks will be required to offer loans at affordable rates, supporting industrialization, small businesses, and local production.
- Holding of Foreign Reserves Domestically – The bill proposes that Nigeria’s foreign reserves be stored within the country, reducing exposure to external economic vulnerabilities and enhancing financial self-reliance.
- Reinforcing the Naira as the Primary Currency – The Naira will become the exclusive currency for all domestic transactions, ensuring it dominates Nigeria’s financial operations.
- Voluntary Conversion of Domiciliary Accounts – Nigerians holding domiciliary accounts will have the option to voluntarily convert their balances into Naira as the value of the local currency strengthens.
- Streamlined Access to Foreign Exchange – The bill promises to improve access to foreign exchange for essential needs such as travel and education, with a more efficient regulatory system.
Senator Nwoko drew inspiration from Morocco, where the Dirham has maintained stability against global currencies for over 35 years due to strict domestic currency policies. He argued that Nigeria, with its vast natural resources and large population, could achieve similar financial stability. “Nigeria has the potential to stabilize its economy like Morocco did with its currency,” Nwoko said, urging Nigerians to support the shift towards using the Naira.
If passed, the bill could pave the way for Nigerian banks to expand their services internationally, providing modern financial products such as global cashless wallets. This move could address current limitations, such as the inability of Nigerian debit cards to process international online transactions.
Senator Nwoko assured that as the Naira strengthens, the need for foreign currencies will gradually diminish, fostering greater national pride and economic independence for Nigeria.
