The Commission had recommended the review of the Nigerian Foreign Exchange Act to empower the Central Bank of Nigeria (CBN) to jail any bureau de change operator who holds on to foreign currency for more than 30 days.

It recommended two years jail term or 20 per cent fine of the amount of the currency held in their possession for one month.

The Senate’s spokesperson, Senator Aliyu Abdullahi, said the measure is counter-productive and will undermine many of the reform efforts already being put in place in the legislature and by government ministries intended to boost investors’ confidence.

According to him, the proposed changes are intended to help control capital flows and prevent foreign exchange from being taken out of Nigeria.

"The Upper Chamber believes the CBN should have the authority to regulate the forex market and determine the exchange rate policy as already enshrined in its enabling Act," Abdullahi said.

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While describing some of the Commission’s recommendations as sound and could help Nigeria’s investment climate, he insisted that a market-oriented exchange rate policy is the best recipe for guiding the operations of the foreign exchange market.

He said such policy will ensure the supremacy of market mechanisms in efficiently allocating the scarce forex resources.

The Department of State Service (DSS) had last week arrested foreign currency hawkers in Kano state, and arrested over 40 of them.