Senate vows to reject proposal to punish FOREX owners

Olufemi Samuel, Abuja

The Senate has expressed surprise at a recommendation by the Nigerian Law Reform Commission for 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 of 20 percent of the amount of the foreign currency held in their possession for more than 30 days.

The Senate stated that with its focus on boosting investors’ confidence and said that such move that would prevent investors from making  free entry and free exit from the market will be rejected by its members.

The Senate spokesman, Senator Aliyu Sabi said, “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 that 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.”