The CBN governor, Yemi Cardoso has been summoned by the House of Representatives to explain the rationale behind the lifting of the foreign exchange ban on some imported items.
The lower chamber of Nigeria’s National Assembly made the decision to summon the CBN governor following a motion raised at plenary on Tuesday by a lawmaker Sada Soli who argued that the lifting portends serious ramifications for the local manufacturers of such items.
The Cardoso-led apex bank, last week, made the decision to remove the 43 items from the import prohibition list amidst serious complaints form major stakeholders that the policy has serious implications for the nation’s economy.
Instructively, financial analysts posited that the apex bank’s action will put serious pressure on the country’s foreign exchange market, leading to a further slide in the value of the naira.
Recall that the administration of President Muhammadu Buhari imposed a forex ban on these items in 2015 to conserve the nation’s forex reserves.
Speaking on a motion of public importance today at the House of Representatives chamber, Soli, a lawmaker from Katsina state said the CBN’s decision will greatly affect local production of such items.
The lawmaker stated that it was wrong to encourage the importation of items that could be produced in the country, adding that local manufacturers are now at the mercy of foreign producers of these items.
He warned that the removal of these items from the import prohibition list would lead to factory closure, as local manufacturers would not be able to compete with their foreign counterparts because the production of some of these items is highly subsidized by their home governments.
He explained that the decision would also lead to job losses in the country, adding that the policy is inimical to the unified forex exchange market.
According to him, the lifting of the FOREX restriction on the importation of 43 items may not have a meaningful impact on the rising food inflation as a result of the soaring exchange rate.
Soli said: “Almost all the 43 items are from two critical sectors which have been identified by all policy documents from NEEDS, SEEDS to Vision 2022 as being areas that are critical to economic diversification.
“Some of the listed items enjoy 60%-70% subsidy from their countries of origin, thus putting Nigeria’s local products at a comparative disadvantage and without any protection, and will lead to job losses and social exclusion.
“The benefit of the cheaper imported inputs as stated by the CBN will give undue advantage to middlemen to drive the economy, which is inimical to our economic growth and not suitable to the current unified FOREX market in the country.”
The Godwin Emefiele-led apex bank had in 2015 restricted the items from accessing FX from the I&E window, saying they were “not valid for foreign exchange and could be produced in the country. Items affected include rice, cement, palm kernel, meat and processed meat products, poultry, soap, and cosmetics among others.
