The Nigerian Senate has taken a significant step towards promoting economic stability and reducing the country's reliance on foreign currencies by introducing a bill to ban the use of the dollar and other foreign currencies for local transactions.

The proposed legislation, titled "A Bill for an Act to Alter the Central Bank of Nigeria Act, 2007, No. 7," aims to ensure that all payments, including salaries, are made using the Nigerian naira. If passed into law, the bill will prohibit the use of foreign currencies for local transactions, including salaries, bonuses, and other forms of remuneration.

The sponsor of the bill, Senator Nwoko, has been a long-time proponent of banning the use of foreign currencies in the country. He criticized the widespread use of foreign currencies in Nigeria's financial system, calling it a "colonial relic" that devalues the naira, exacerbates economic difficulties, and erodes Nigeria's monetary independence.

According to Senator Nwoko, the extensive use of foreign currencies in financial transactions continues to erode the value of the naira and fosters a dependency that hinders Nigeria's economic sovereignty. He believes that this legislation is a step towards restoring confidence in the local currency and reducing unnecessary pressures on the economy.

The issue of dollarization, where foreign currencies are used alongside or in place of the domestic currency, has been a long-standing concern in Nigeria. The increasing use of the U.S. dollar in transactions has raised significant concerns about economic stability, particularly since the current administration devalued the currency last year.

As the naira weakens, businesses and individuals have turned to more stable currencies like the U.S. dollar to protect the value of their assets, further embedding dollarization into the economy. This has prompted repeated warnings from the Central Bank of Nigeria (CBN) against the use of dollars and other foreign currencies.

In a statement, the CBN highlighted that certain institutions continue to price their goods and services in foreign currencies and insist on payments in these currencies, instead of the naira, which remains the legal tender in Nigeria. The CBN warned that any person who contravenes this provision is guilty of an offence and shall be liable on conviction to a prescribed fine or six months imprisonment.

The proposed bill aims to boost Nigeria's economy and promote self-sufficiency by increasing naira adoption, strengthening the economy, and harnessing the country's domestic resources. If successful, this legislation could mark a significant shift in Nigeria's economic landscape, reducing the country's reliance on foreign currencies and promoting greater economic stability.

As the bill moves forward, it will be important to monitor its progress and assess its potential impact on Nigeria's economy. With the country's economic stability hanging in the balance, this legislation could have far-reaching consequences for businesses, individuals, and the broader economy.