The Central Bank of Nigeria is seeking new powers to restrict or prohibit the exportation of foreign currency when and where necessary to “protect the economy as well as powers to approve and where necessary restrict or prohibit repatriation of foreign currency to save the Nigerian economy.
The apex bank is proposing a string of new amendments to the Foreign Exchange, Monitoring and Miscellaneous Exchange Act (FEMM). The act signed to law in 2014 basically liberalized the foreign exchange market in Nigeria allowing for foreign investors to import money into the country and repatriate same freely.
This is currently the act that governs the foreign exchange market in Nigeria. Despite this, the CBN believes it is mostly flawed particularly in the current economic situation and seeks to amend a large portion of the act.
The CBN made its position known in a “working paper” shared to members of the CIBN and can also be found in the website of the Nigerian Law Reform Commission.
The CBN also wants an amendment that allows it have the powers to “prevent monopoly and hoarding and a time limit for deposit of foreign currency in the bank”
However, critics of the proposed amendments said the portions of the CBN’s proposed amendments is tantamount to foreign currency controls and abrogating super powers to an “already powerful CBN”
Other amendments being sought by the CBN include the powers to seize foreign currency purchased from the market to be repatriated without restrictions” and thus will like this amended. .
The CBN also believes the act “prohibits the seizure, forfeiture or expropriation of imported money by the government without providing exceptions. As such, the CBN wants to have powers to seize any foreign currency”.
The CBN is also unhappy that the law “allows foreign currency in excess of five thousand dollars imported or exported subject to declaration of statistics reason only.”
The CBN also wants an amendment that allows it have the powers to “prevent monopoly and hoarding and a time limit for deposit of foreign currency in the bank”.
While some aspects of the amendments are well intended, the above recommendations by the CBN does raise questions about the commitment of the CBN and indeed this government to allow for a market driven flexible exchange rate.