Post Views: 465 As hinted last month, the Central Bank of Nigeria (CBN) says it has yielded to recommendations that the list of 41 items barred from d...
As hinted last month, the Central Bank of Nigeria (CBN) says it has yielded to recommendations that the list of 41 items barred from direct access to its official foreign exchange window be expanded to include fertilizer, which can be locally produced.
In a circular on Monday, December 10, 2018, the CBN said forex can no longer be procured to import fertilizer with effect from Friday, December 7, 2018.
According to the circular signed by Ahmed Umar, director, Trade & Exchange Department, the CBN said it “will ensure that transactions (Form ‘M’) on fertilizer for which payments are outstanding are settled at the appropriate settlement dates.”
Addressing stakeholders at the 2018 Annual Bankers’ Dinner, organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, on Friday, November 30, 2018, Godwin Emefiele, CBN Governor, explained the thought process that informed the decision to restrict access to forex for 41 items that can be produced in Nigeria.
The decision, he continued, was part of a three-pronged approach to fixing the economy soon after he assumed office, the apex bank analyzed Nigeria’s import bill. Domestic manufacturers where then encouraged “to consider local options in sourcing their raw materials, by restricting access to foreign exchange on 41 items,” as part of moving from being a a nation wholly dependent on consumption, to one that produces a large proportion of what it needs, particularly in areas where the resources or inputs needed for production are widely available across the country.
Based on the CBN’s findings, Emefiele told the gathering that he is strong convinced that the recovery of Nigeria’s “economy from the recession may have been much weaker or even negative, without the implementation of the restriction on 41 items.
“Our research supports the conclusion that the combination of the restriction on 41 items along with other measures imposed by the fiscal and monetary authorities has helped to promote the recovery,” he said, warning against any attempt to reverse the actions, as it may have untold consequences on Nigeria’s growth trajectory, particularly the push to diversify and restructure the economy.
Already, he said many entrepreneurs are taking advantage of the policy, venturing into the domestic production of the restricted items with remarkable successes and great positive impact on employment, resulting in a dramatic decline in Nigeria’s import bill and the increase in domestic production of these items attest to the efficacy of this policy.
“Noticeable declines were steadily recorded in our monthly food import bill from US$665.4 million in January 2015 to US$160.4 million as at October 2018; a cumulative fall of 75.9% and an implied savings of over US$21bn on food imports alone over that period.
“Most evident were the 97.3% cumulative reduction in monthly rice import bills, 99.6% in fish, 81.3% in milk, 63.7% in sugar, and 60.5% in wheat.
“We are glad with the accomplishments recorded so far,” Emefiele added, assuring that the policy would continue with vigor until the underlying imbalances within the Nigerian economy have been fully resolved.