November 1, 2017 / 8:58 PM / a year ago

Nigeria moves towards border controls on hard currency

LAGOS, Nov 1 (Reuters) - A draft law to ease a dollar shortage by restricting movement of hard currency in and out of Nigeria passed its second parliamentary reading on Wednesday.

A dearth of dollars since crude prices slumped in 2014, slashing government revenues, prompted a recession in 2016 that Africa’s largest economy exited in the second quarter of this year.

Oil sales are Nigeria’s main source of foreign exchange.

During the currency crunch most businesses have sought dollars on the black market where the local naira, at the start of the year, traded around 30 percent weaker than on the official market. To try resolve the currency crisis, the OPEC member state has set up at least different six exchange rates.

The bill, read in the House of Representatives, is designed to replace a law passed in 2004.

It would ban individuals and companies from exporting more than $50,000 in cash without written approval of the central bank, with contraventions punishable by up to two years in prison.

Anyone importing more than $10,000 would have to disclose the source of and use for the funds, according to a copy of the bill seen by Reuters on Wednesday.

The bill, which would have to be passed by the upper house to become law, also seeks to extend the time for issuance of capital importation certificates to 72 hours from 48 hours.

The upper house of parliament agreed in September 2016 to investigate whether Africa’s biggest telecoms company, MTN, unlawfully repatriated $13.92 billion between 2006 and 2016, because it allegedly did not obtain certificates declaring it had invested foreign currency within the deadline.

MTN denied any wrongdoing.

Nigeria’s multiple exchange rates have come close to converging in the last few months as increased oil production, linked to the cessation of militant attacks on energy facilities in the Niger Delta, has seen the supply of dollars improve. (Writing by Chijioke Ohuocha; Editing by Alexis Akwagyiram and John Stonestreet)

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