CBN’s restrictive forex policy on imports stays, says Emefiele

The Central Bank of Nigeria (CBN) will continue to deny importers access to foreign exchange (forex) to bring in goods which can be produced locally, its Governor, Godwin Emefiele, has said.

Emefiele, who made this known in Lima, Peru, said the policy was not up for review.

The apex bank has identified about 41 items which it denied eligibility to access forex from the interbank window.

The CBN chief, while briefing reporters from Nigeria at the International Monetary Fund (IMF)/the World Bank Group meetings, on the outcome of the Nigerian delegation’s engagement at the event, said contrary to insinuations, the regulator has not banned any goods from being imported.

“We have not banned any items. What we just did was to exclude them from accessing foreign exchange; items that can be produced in the country. We think that because of the problems we’ve had, the drop in commodity prices and revenue accruing to the nation, and because we know that these items have been produced in large quantities in this country in the past, that provision still stands. The CBN is not reconsidering the ban, the exclusion still stands,” he said.

The apex bank’s chief said since the policy has been in force, he has been prompted from various quarters to even elongate the ‘excluding items’ list, adding that he however said the CBN would confine itself to the items presently in the restriction basket.

He said: “The Central Bank has at different fora, even received the list of additional items which some section think should be included from receiving foreign exchange, but the CBN has for now limited the options to the existing ones.”

 

In defending the apex bank’s stance, Emefiele argued that if there’s global economic slowdown which has affected the growth and resilience of emerging and frontier markets, including Nigeria, and there is a drop in revenue receipts which has impacted negatively on everyone, “there’s need for the regulator to intervene to restore stability in the exchange rate regime, look for ingenuous ways of increasing the sources of foreign exchange, such as encouraging exporters to repatriate their proceeds and make more foreign exchange available to the real sector so as to grow the economy.”

He said the reforms that commenced about two years ago, with respect to economic diversification and taxation, will be vigorously pursued with a view to increasing government’s revenue base.

He said since about two years ago, even before government started the reforms, focusing on how to increase the country’s revenue base has been on the front burner.

He said the collaboration with Mckinze (a foreign accounting tax consultant), resulted in the increase of revenue by about N75billion last year, adding that N150billion revenue target is being expected from this engagement, this year.

Emefiele, who spoke on a wide range of issues, said investors are exiting from frontier and emerging markets on account of the uncertainty and insecurity that pervade the markets, saying that in the last quarter of this year alone, about $48billion capital outflows has been recorded in these markets.

He said investors are pulling funds out and are looking to more stable and safe zones to invest.

“This is why we are saying that we should be nationalistic in our approach; that we have to carry our cross by ourselves,” he said.

He said there was need to set priorities by making sure that “foreign exchange is made available to only those who are importing essential raw materials and goods we know cannot be produced within the country. That is the only way we can conserve our foreign exchange.”

He said the CBN will continue to intervene in the foreign exchange market and ensure that forex is made available to meet the import needs of the country.

The CBN chief said it is in this respect that the apex bank is appealing to exporters to make available their export proceeds to further boost available foreign exchange. 

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