Senate shoots down bill to boost external reserves with gold

The Senate has rejected a bill proposing the use of gold to bolster the nation’s reserves and protect the economy.

The bill, titled “Foreign Exchange (Control and Monitoring) Bill, 2024 (SB. 353)” and sponsored by Senator Sani Musa (APC, Niger East), was dismissed after debates by lawmakers who opposed it.

Musa explained that the bill was first read on Tuesday, February 20, 2024.

He noted that the bill aimed to repeal the Foreign Exchange (Monitoring and Miscellaneous Provision) Act, Cap. F34, Laws of the Federation of Nigeria, 2004, and to establish a Foreign Exchange Market in Nigeria for the control, monitoring, and supervision of transactions within the market.

The Niger lawmaker emphasized that the bill’s objective was to establish a foreign exchange market:

“To provide for the regulation, monitoring, and supervision of the transactions conducted in the market and for related matters.

“To contribute to the sound development of the National Economy by striving to facilitate foreign transactions and to maintain an equilibrium of balance of International payments.”

He added that the bill aimed to stabilize the currency’s value by ensuring the liberalization of foreign exchange transactions, maintaining an equilibrium in the balance of international payments, and revitalizing market functionality.

Musa explained that the bill sought to expand Section 1 of the existing Act by incorporating three new provisions. These additions would provide clarity and empower the Central Bank of Nigeria to administer, control, and manage all dealings and transactions related to foreign exchange matters.

He said, “The newly introduced clauses will enable the CBN to determine the basic exchange rate of purchase and sale of foreign exchange.

“Clause 6 of the Bill introduces New Sub-clauses (2), (4) and (5) which require authorised dealers to: Render returns to the CBN on sources of foreign exchange over $10,000 and utilisation of same, and obtain prior approval of the CBN when seeking to import foreign currency notes.

“Part Ill of the Bill makes elaborate provisions for the grant of a license to carry on business dealings in foreign exchange. In this part, provisions were made for refusal of license, suspension or revocation of license, review and appeal, etc.

“Clause 18 (1) (a) and (b) were added to expand the scope of dealers in the market and where funds are purchased from the Bank. The market rate may be subject to rules and regulations prescribed by the Bank.

“The operation of domiciliary account shall be as prescribed by the bank and the powers of the CBN have been widened to prescribe how foreign exchange may be accepted for the payment for goods and services in Nigeria.

“Mr President the future of any nation is a function of her ability as a nation to manage its economy efficiently and optimally. Intrinsically linked to the wellness of a country’s economy is the state of its Foreign Exchange Market usually regulated by a foreign exchange regime.”

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