In a bold move to restore Nigeria’s monetary sovereignty, the Senate has taken steps to end the use of foreign currencies for transactions within the country, including for payments and salaries.
The proposed legislation, aimed at securing the Naira’s dominance in the economy, mandates that all payments, including salaries, be conducted in Nigeria’s local currency, with exports also required to be priced in Naira.
The bill, 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 for Other Related Matters,” is spearheaded by Senator Ned Munir Nwoko, Chairman of the Senate Committee on Reparations and Repatriation. It seeks to strengthen local currency confidence and eliminate practices that undermine the Naira’s value.
Senator Nwoko argues that Nigeria’s dependence on foreign currencies—such as the Dollar and Pound—has weakened the Naira, creating economic instability. He described the continued use of these currencies in domestic transactions as a colonial legacy that stifles the nation’s economic autonomy.
Key features of the bill include:
Prohibits salaries, transactions, and payments in foreign currencies, ensuring all workers, including expatriates, are paid in Naira.
Requires crude oil and other exports to be sold exclusively in Naira, compelling international buyers to purchase the currency and driving its demand and value.
Positions the Naira as the central currency for all financial operations, reinforcing its dominance in the economy.
Seeks to abolish informal currency markets that undermine the formal economy and encourage unethical practices such as round-tripping by banks.
Directs banks to provide loans at affordable interest rates to stimulate industrialization and economic growth.
Advocates for storing Nigeria’s foreign reserves domestically to safeguard the country’s economic sovereignty and reduce exposure to external vulnerabilities.
Reclaim monetary independence by prioritizing the Naira for both domestic and international transactions.
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Increase the currency’s value through higher demand driven by its exclusive use for exports.
Foster fairness in salary payments by standardizing remuneration in Naira for both local and expatriate workers.
Support the manufacturing sector with accessible credit facilities to encourage local production and reduce dependency on imports.
Foster national pride and economic self-reliance by reducing reliance on foreign currencies.
Build a diversified and resilient economy through coordinated monetary and fiscal policies.
Senator Nwoko also explained that while transitioning domiciliary accounts to Naira will be voluntary, as the Naira strengthens, the need to hold foreign currencies would naturally diminish. He also assured that access to foreign exchange for travel and other essential services would be simplified through banking reforms.
Drawing inspiration from Morocco, which has maintained a stable currency by using its local currency exclusively, Senator Nwoko believes that Nigeria has the potential to surpass such success by shifting towards a Naira-dominant economy.
If passed, the legislation could signal the beginning of a transformative era for Nigeria, reinforcing the Naira’s role in driving economic growth, fostering national pride, and ensuring long-term financial stability.
By eliminating foreign currency reliance, Nigeria can pave the way for a more self-sufficient and resilient economy.
