Senate Rejects Bill to Use Gold for Boosting External Reserves

The Senate has turned down a proposal to use gold to strengthen Nigeria’s foreign reserves in order to support the economy.

Senator Sani Musa from Niger East, who sponsored the bill titled “Foreign Exchange (Control and Monitoring) Bill, 2024 (SB. 353),” faced opposition from lawmakers during debates, leading to the bill’s rejection.

Musa explained that the bill, first introduced on February 20, 2024, aimed to repeal the existing Foreign Exchange (Monitoring and Miscellaneous Provision) Act and establish a new foreign exchange market in Nigeria. The new bill sought to regulate, monitor, and supervise transactions within this market.

The goals of the bill included establishing a foreign exchange market, regulating transactions, facilitating foreign transactions, maintaining balance in international payments, and stabilizing the currency's value by liberalizing foreign exchange transactions.

Musa emphasized that the bill would enable the Central Bank of Nigeria (CBN) to manage all dealings related to foreign exchange. It proposed expanding the existing law to grant the CBN more authority to control and manage foreign exchange transactions.

Key provisions of the bill included:

• Allowing the CBN to set basic exchange rates for buying and selling foreign exchange.
• Requiring authorized dealers to report foreign exchange transactions over $10,000 to the CBN.
• Mandating prior CBN approval for importing foreign currency notes.
• Establishing licensing procedures for businesses dealing in foreign exchange, including license refusal, suspension, and revocation processes.

Musa argued that the bill would help the CBN regulate how foreign exchange is used for payments in Nigeria and manage domiciliary accounts.

In his final remarks, Musa stressed that the effective management of the foreign exchange market is crucial for the economic health of the nation. He highlighted the importance of a regulated foreign exchange regime for maintaining a stable and efficient economy.

Despite these arguments, the Senate ultimately decided against the bill.