The Senate has expressed surprise at a recommendation by the Nigerian Law Reform Commission for a review of the Nigerian Foreign Exchange Act to make people who have in their possession for more than 30 days foreign currencies to go to jail for up to two years or pay a fine of 20 per cent of the amount.
The Senate stated in a statement signed by its spokesperson, Senator Aliyu Abdullahi, that with its focus on boosting investors’ confidence in the nation’s economy, such a move would prevent investors from entering and exiting the market freely and that its members would reject the proposal outright.
Abdullahi said in the statement, “The measure is disruptive and counterproductive, threatening to undermine many of the reform efforts already underway in the legislature and by government ministries, which are intended to boost investor confidence.
“The Senate will never pass such a punitive and regressive proposal. Overall, some of the commission’s recommendations have many sound attributes and could help Nigeria’s investment climate. We believe the CBN should have the authority to regulate the forex market and determine the exchange rate policy as already enshrined in its enabling Act.
“A market-oriented exchange rate policy is the best recipe for guiding the operations of the foreign exchange market. This will ensure the supremacy of market mechanisms in efficiently allocating scarce forex resources. We will continue to work with the Executive to halt the worsening recession and return to economic growth.”
The proposed changes are said to be intended to help control capital flows and prevent foreign exchange from being taken out of the country.
“The amendments are necessary for effective monitoring and control, and to ensure probity in foreign exchange transactions in Nigeria,” the draft published on the website of the NLRC stated.
Meanwhile, the CBN has said that it has nothing to do with such a legislation that will bar citizens from holding foreign currencies for more than 30 days.
The Acting Director, Corporate Communications, CBN, Isaac Okorafor, stressed that the apex bank, in line with its mandate, was committed to safeguarding the international value of the country’s legal tender.
He denied knowledge of the proposed clause recommending a jail term of two years for any holder of foreign exchange in cash or a fine of 20 per cent of the amount.
“To the best of my knowledge, the Central Bank of Nigeria has not proposed any bill seeking to arrest and jail persons holding foreign exchange for more than 30 days,” Okorafor said in a statement.
He also denied that the CBN was planning to confiscate funds in domiciliary accounts of individuals, saying such a claim was false.