Senate rejects bill aimed at reviewing forex market regulations

On Thursday, the Senate rejected a bill seeking to review foreign exchange market regulations in the country.

The bill, sponsored by Senator Sani Musa (APC Niger East), Chairman of the Senate Committee on Finance, aimed to control, monitor, and supervise transactions in the foreign exchange market. Titled “The Foreign Exchange (Control and Monitoring) Bill, 2024 (SB. 353),” it was first read on February 20, 2024.

In his lead debate, Musa described the bill as essential for repealing the Foreign Exchange (Monitoring and Miscellaneous Provision) Act, Cap. F34, Laws of the Federation of Nigeria, 2004. He stated it would help regulate, monitor, and supervise market transactions, contributing to the national economy by facilitating foreign transactions and maintaining a balance of international payments.

Musa explained that the bill aimed to stabilize currency value by liberalizing foreign exchange transactions and revitalizing market functionality. It proposed expanding Section (1) of the existing Act to empower the Central Bank of Nigeria (CBN) to manage all foreign exchange dealings. New clauses would enable the CBN to set exchange rates and require dealers to report foreign exchange transactions over $10,000.

The bill also proposed licensing regulations for foreign exchange businesses, including rules for granting, suspending, and revoking licenses. It sought to widen the CBN’s authority over the operation of domiciliary accounts and the acceptance of foreign exchange for payments in Nigeria.

Despite Musa’s arguments, many senators expressed concerns that the bill could undermine the CBN’s existing regulatory framework. Senators Solomon Adeola, Tokunbo Abiru, and Aliyu Wadada, among others, voiced strong reservations.

Senator Ibrahim Dankwambo argued that any new regulations should originate from the executive branch to avoid confusion. Senator Adams Oshiomhole emphasized that passing the bill could lead to legislative overreach into CBN’s domain.

Senate President Godswill Akpabio suggested Musa withdraw the bill for further consultation, but Musa declined. A voice vote was called, and the majority of senators voted against the bill, leading to its rejection.