The Nigerian Law Reform Commission (NLRC) is considering amendments to its foreign currency exchange laws in an attempt to stave off the worsening economic crisis in Nigeria.
The Nigerian economy has seen a recession — contraction of 2.24 percent in the third quarter — as well as inflation and weakened currency following drops in the sale and prices of crude oil.
Currently, the Nigerian naira exchange rate with U.S. dollars is 315:1, up considerably from a consistent 200:1 exchange in late 2015 through June of this year. Years prior it was closer to 160:1.
The NLRC, which advises the Nigerian government, drafted a bill to promote the development and maintenance of the currency market. The reforms seek to address difficult-to-regulate currency laws. One provision included in the draft would make it a criminal offense for citizens to hold cash outside the banking system.
Reuters quotes the NLRC provision: “The possession of foreign currency by any person without depositing same in a domiciliary account within 30 days of its acquisition constitutes an offense liable on conviction to two years imprisonment or to a fine of 20 percent of the amount of the foreign currency involved.”
Despite the ongoing economic crisis in the nation of over 5 million, technology startups in Nigeria’s capital city of Lagos have been going strong, drawing attention from international and Silicon Valley investors in recent months. Nigeria’s mobile money landscape is also expected to see a considerable boost once Africa’s biggest eCommerce player, Jumia, launches its own payments solution, JumiaPay.