Eight years after, the Central Bank of Nigeria (CBN), in a major monetary policy shift, on Thursday October 12th restored the 43 items, which were banned from accessing forex since June 2015. CBN said the move is to sustain the stability of the foreign exchange market and the derivation of optimum benefits from goods and services imported into the country.
The 43 items on the list include rice, cement, toothpicks, margarine, palm kernel/palm oil products/vegetable oils, meat and processed meat products, vegetables and processed vegetable products, poultry including chicken, eggs and turkey, soap and cosmetics, tomatoes/tomato pastes, milk, maize and tinned fish in sauce (gelsha/sardines). Others are enamelware, steel drums, steel pipes, wire rods (deformed and not deformed), iron rods and reinforcing bars, wire mesh, steel balls, security and razor wire, wood particle boards and panels, wood fiber boards and panels, plywood boards and panels, wooden doors, furniture, glass and glassware, kitchen utensils, tableware, tiles – vitrified and ceramic; textiles, woven fabrics and clothes.
SHIPS & PORTS’ Oluwatoyin Amao sought the opinion of Nigerians on how the lifting of the ban will impact the present forex crisis.
Felix Olomila, Delta
What this means economically is that those importing these goods can also now get forex directly from the bank which will impact the other source of dollars and in few months the demand for dollars from the other sources will shrink but the challenge is, can you trust the Central Bank of Nigeria (CBN) not to commence racket on dollars. However, if it works the pressure on dollar will reduce outside the bank.
Elvis Ehimotor, Lagos
This decision may worsen the forex crisis. What the government has done is to increase demand without a commensurate boost in supply. You know when you lift the ban, you are increasing the demand. At face value, I can say they are increasing the demand but I need to understand the motivation. What they should be focusing on primarily is to boost supply. Supply has to increase, oil theft should be minimized and money from oil revenue should be used to boost the economy.
David Jide, Ilorin
This policy is ill timed and will have a negative impact for import substitution and local manufacturing. Its immediate impact will be to reduce the premium between the official and the parallel market. It will not ease the present forex crisis. Rather, the official exchange rate will further rise to meet the parallel market rate.
Femi Akeju, Lagos
This is a critical issue that must be well thought of before implementation because I believe that liberalization should give room for all in participating in the foreign exchange market without discrimination. So, you liberalise the source of supply but you have not liberalised the demand end of the market and you still want to hold on to the list of 43 banned items. The idea is for a unified exchange rate. If you are still saying that some products are legitimate items and are eligible while some legitimate items are not eligible, then you are pushing some transactions outside that market. So, you are not going to have a unified exchange rate. If you liberalise, it is not your business who I sell to or what person who bought uses it for as long as it is not contraband. The CBN is still holding to the past and the new regime will ensure that the past becomes the past if we want to enjoy the benefits of unification. You must liberalise both ends of the market. You must liberalise the supply end and the demand end. You can’t exclude any legitimate transaction; you can’t exclude any legitimate agents who have been licensed by the government.
Frank Efe, Delta
From a monetary and forex policy perspective, lifting import bans might compel certain large and notable Nigerian companies to innovate and promote growth through productivity, instead of relying on monopolistic practices, state protection, and inflated domestic prices for consumers.
The insistence of the CBN on the banned items is discriminatory and contradicts the idea of a liberalised foreign exchange. I think CBN should once and for all remove the ban on access to forex placed on importers of the 43 items to ensure a level playing ground in the market. At this stage, nobody should be scared of what anybody wants to do with dollars. It should be a free market. As we are gradually inching towards a free float foreign exchange market, there should be no restriction.
Ahmed Salami, Ibadan
This is a dicey one. Why can’t the government find a way of protecting what we produce locally because that is their primary duty? One can’t say the extent or implication of the reversal of the ban but notwithstanding, government must support the people. It is not negotiable. The government has a duty to protect its local businesses, no matter what happens. The government has a duty to tackle the menace of forex, and it is a war that the country must fight to stabilise the currency.
Isaac Abiodun, Ilorin
This is a move to gradually improve confidence in the forex market, which had been weighed down by long-dragging illiquidity and unorthodox policies. We can recall that the ban was instituted due to a material plunge in forex inflows. Thus, to forestall the re-occurrence of the underlying drivers of dollar demand management and unorthodox forex policies in Nigeria, the supply of forex will have to improve sooner rather than later. To improve forex supply, the CBN and fiscal authorities may have to evaluate the possibility of raising dollar facilities.
Gbenga Oyebamiji, Lagos
It is aimed at boosting confidence and eliminating uncertainties in the market. It entails reforms, compliance with official market rates and liquidity interventions. The unbanning of the 43 items will deepen the market and stimulate bilateral trade and inward-looking industrialisation strategies. My appeal to the CBN is to ensure speedy implementations of the policies. To enhance the buffers, the CBN should pursue a paradigm shift from demand to supply measures to boost the needed liquidity in the market. Also, CBN should emphasise intervention in the retail end sector where the spikes were most pervasive through the effective pass-through of the BDCs to close the gaps between the official and unofficial exchange rates.
Temitope Ogunyemi, Lagos
I don’t think it will ease forex crisis because the allocation of forex should be for the importation of raw materials and machinery. As a nation, we have to be very careful because forex may be wrongly used for the importation of unnecessary things. I know many non-manufacturers had invested sourced foreign currencies on the importation of gift items. I want to charge the government to ensure that manufacturers did not hold the short end of the stick that could lead to factory closure and loss of jobs.
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