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New FEA may recommend jail terms for foreign currency speculators

The Federal Government is currently is at the verge of sending an Executive Bill to the national Assembly on new ways to control foreign exchange crisis.

If the bill sails through, it will give the Central Bank of Nigeria (CBN) more power to control capital flows and prevent foreign-exchange being taken out of the country, including jail term and fines for offenders as authorities’ battle a shortage of dollars.

A Bloomberg report last week, revealed that authorities are planning to jail offenders for as long as two years if one is caught holding dollars in cash for more than 30 days, or fine them 20 percent of the amount, according to a draft amendment to Foreign-Exchange Act (FEA).

Experts say a process of holding foreign currency for up to a month can only be possible when one is driving speculation and spiking the market to respond to momentary drop in liquidity created artificially.

The proposals were published last week on the website of the Nigerian Law Reform Commission, which reviews legislation. Regulators should also be able to prevent money being repatriated “in accordance with the terms and conditions as may be prescribed by the central bank from time to time,” the draft shows.

But in a telephone interview, spokesman of the apex bank, Mr. Isaac Okoroafor denied any knowledge of the CBN in planning to disturb anybody with foreign currency, come up with any new regulation that will target such people, saying “Everybody is free to hold his or her currency and use same the way he or she wants.

He said “The CBN is not disturbing genuine registered members of the Bureau D Change, but illegal operators.

It would be recalled that the existing law is “narrow in scope” and “prohibits the seizure, forfeiture or expropriation of imported money by the government without providing for exceptions,” according to the document. The amendments are necessary “for effective monitoring and control, and to ensure probity in foreign-exchange transactions in Nigeria.”