CBN defends forex restriction on 42 items

CBN asks importers to trade with yuan instead of dollar 
CBN Governor, Godwin Emefiele. PHOTO CREDIT: DailyPost


Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, on Tuesday said the bank’s policy to restrict importers of some 42 items from accessing foreign exchange was the right call of action.

Emefiele made this known in Abuja while fielding questions from journalists at the end of the first Monetary Policy Committee (MPC) meeting for the year.

He said that the CBN took the measure to ban 42 items from accessing foreign exchange through official routes to encourage local production of the items and conserve the nation’s depleting foreign reserves.

Some of the 42 items not valid for foreign exchange at the Nigerian window include rice, cement, fertiliser, margarine, palm produce, beef, vegetables, poultry and eggs, wooden doors and Iron rods.

“Available data has shown that in 2014, Nigeria imported 1.2 million metric tonnes of rice, in 2015 it had dropped to 644,000 metric tonnes and 2016, to 58,000 metric tonnes, 23,000 metric tonnes in 2017 and 6,000 metric tonnes in 2018.

“In terms of foreign exchange allocation, for wheat importation, we spent 1.2 billion dollars in 2016; by 2017 it went down to 628,000 dollars.

“Sugar had gone down from 462 million dollars in 2014 to 255 million dollars in 2017. Fish dropped from over one billion dollars in 2014 to 18 .96 million dollars in 2017.

“Importation of tomatoes has dropped from 7 million dollars to less than a million dollars in 2017.

“These results are because of the actions of the government supporting the monetary policy of Nigeria today and we will be aggressive in supporting small holder farmers that cultivates these items,” he said.

Emefiele said that the CBN would continue to take an aggressive stance to ensure that any food item currently being imported that can be produced in the country is banned.

He said CBN was currently reviewing a list of other items and that once they were convinced that there were companies in the country that could sufficiently produce the said items; they would also be placed on the foreign exchange restriction list.

“We think that the initiatives that the CBN has put in place in the past to cut import and diversify the structure of the Nigerian economy is yielding result and we will continue to be that aggressive.

“The CBN together with EFCC would investigate any company, any individual suspected of bringing this item either through any border or through smuggling of any means for money laundering and economic sabotage.

“If we discover that these companies or individuals are involved in any economic sabotage, we will write to all the banks, we will blacklist those companies and individuals running those companies.

“The companies can no longer operate any bank account in any Nigerian bank and there will be no need to talk about prosecuting you but we will not allow you do business again in Nigeria,” he said.

Emefiele said that CBN intervention in the foreign exchange market to keep it stable was the right call.

He recalled that in 2016, the Naira had depreciated to more over N500 to a dollar and could have reached N1,000 without the intervention of the CBN.

He reiterated the bank’s commitment to continue to intervene in the interbank foreign exchange market to ensure liquidity in the foreign exchange market and maintain stability.

Emefiele announced that the CBN had successfully resolved the issue with MTN on allegation of illegal repatriation of 8.1 billion dollars.

“I am glad to tell you in November we held a round of meetings with MTN officials even from South-Africa and by December we concluded those engagements and the matters were resolved.

“It resulted in a notional reversal. Let me make it clear that it is not a fine or a penalty. It was a notional reversal of 53 million dollars amounting to about N19.5 billion.

“This amount has since been paid by the MTN and terms of settlement of this matter has already been lodged at the Nigerian court,” he said.   

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