The Senate on Monday expressed its readiness to kick against
the proposals by Nigerian Law Reform Commission for a review of the Nigerian
Foreign Exchange Act in order to empower the Central Bank of Nigeria to jail
people for up to two years or fine them for 20 percent of the amount of the
foreign currency held in their possession for more than 30 days.
The upper legislative chamber in a statement signed by its
spokesperson, Senator Aliyu Sabi Abdullahi stated that with its focus on
boosting investor' confidence in the nation's economy, such move as proposed by
the Commission that will prevent investors from making free entry and free exit
from the market will be outrightly rejected by its members.
The Senate noted that the law if passed would be
counter-productive to the nation’s economic wellbeing.
"The measure is disruptive and counterproductive,
threatening to undermine many of the reform efforts already underway in the
legislature and by government ministries intended to boost investor confidence.
“The Senate would never pass such a punitive and regressive
proposal.
"Overall, some of the Commission’s recommendation has
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 the scarce forex resources", the
Senate stated.
It added: “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.
Analysis of the proposed rules changes, which were posted on
the Commission’s website, states that “the amendments are necessary for
effective monitoring and control, and to ensure probity in foreign-exchange
transactions in Nigeria.”
Last September, the Senate spearheaded an economic agenda to
pass key reform legislations to promote economic growth through greater public
sector participation, boost investor confidence and create jobs.
Also in June, the CBN was cheered for loosening its control
over exchange rate policy in a bid to encourage investors to return to Nigeria
and prevent capital flight.
Hopes were high after the Nigerian government finally
allowed the naira to float, as was recommended by domestic and international
investment advisors.
Currently, however, the markets do not reflect a loosening
of CBN control over the forex market, leading to the emergence of multiple
exchange rates.
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