Senate rejects bill to repeal foreign exchange act and establish forex market in Nigeria

The Senate has rejected a bill aimed at repealing the Foreign Exchange (Monitoring and Miscellaneous Provision) Act, 2004, and establishing a new Foreign Exchange Market in Nigeria.

Sponsored by Senator Mohammed Sani representing Niger East, the bill was first read in February 2024. Its purpose was to introduce provisions for the control, monitoring, and supervision of transactions within the Foreign Exchange Market.

In his lead debate, Senator Sani emphasized that the bill did not seek to establish any new agency or commission that would require government funding. He argued that, if passed, the bill would contribute to the sound development of Nigeria’s economy, facilitate foreign transactions, and stabilize the naira by liberalizing foreign transactions.

Clause 6 of the bill proposed new sub-clauses requiring authorized dealers to report foreign exchange sources exceeding $10,000 to the Central Bank of Nigeria (CBN), detail their utilization, and obtain prior CBN approval for importing foreign currency notes.

While some lawmakers supported the bill, others called for further scrutiny, describing certain provisions as confusing. Concerns were raised about the immediate impact the bill’s passage could have on the forex market and the potential pressure on the naira.

After a voice vote, the Senate decided to quash the bill.