Senate proposes law to ban use of dollar, others for transactions

The Senate has introduced a bill seeking to prohibit the use of the US dollar and other foreign currencies for payments and transactions in Nigeria.

The bill, sponsored by Ned Nwoko, a senator representing Delta North, and 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 Other Related Matters”, has scaled first reading.

The bill seeks to mandate that all payments, including salaries and transactions, be conducted in naira to strengthen its value and restore Nigeria’s monetary sovereignty.

According to Nwoko, the widespread use of foreign currencies, such as the US dollar and British pound sterling, has eroded confidence in the naira, weakened its value, and contributed to the country’s economic challenges.

He argued that this practice is a colonial remnant that impedes Nigeria’s economic independence.

The proposed legislation would require that crude oil and other exports be sold exclusively in naira, compelling international buyers to acquire the currency, which would drive its demand and value.

By positioning the naira as the central currency for all financial operations, the bill seeks to reinforce its dominance in the economy, eliminate informal currency markets that undermine the formal economy, and encourage unethical practices such as round-tripping by banks.

The bill proposes that banks would be directed to provide loans at lower interest rates to stimulate industrial growth and boost local production, while Nigeria’s foreign reserves would be stored domestically to enhance economic security and minimise vulnerability to external shocks.

Nwoko clarified that the transition of domiciliary account balances to naira would be voluntary for account holders. As the naira strengthens, the necessity of holding foreign currencies is expected to decline, ensuring a seamless transition.

He assured Nigerians of continued access to foreign exchange for legitimate purposes such as travel, with reforms planned to streamline access to Basic Travel Allowance (BTA) and other forex needs.

Nwoko emphasised that prioritising the naira in domestic and international transactions is essential for achieving long-term economic stability and self-reliance.