The Central Bank of Nigeria has recently stopped the sales of foreign exchange to importers of cement, private jets, poultry products, metal boxes, and 35 other items in order to carp up the fast depleting external reserves.
The Apex bank, in a circular dated June 23, 2015, stated that the execution of the policy would help to preserve foreign reserves, generate employment and as well facilitate the resuscitation of domestic industries.
The circular, which was signed by the Director, Trade and Exchange, CBN, Mr. Olakanmi Gbadamosi, said that it was essential to exclude importers of some goods and services from accessing foreign exchange at the Nigerian foreign exchange market in order to promote local production of the items.
It states, “In the continuing efforts to sustain the stability of the forex market and ensure efficient utilisation of forex and the derivation of optimum benefits from goods and services imported into the country, it has become imperative to exclude importers of some goods and services from accessing foreign exchange at the Nigerian forex markets in order to encourage local production of these items.
“The implementation of the policy will help conserve foreign reserves as well as facilitate the resuscitation of domestic industries and improve employment generation.
“For the avoidance of doubt, please note that the importations of these items are not banned, thus importers desirous of importing these items shall do so using their funds without any recourse to the Nigerian foreign exchange market.”
The list of 40 items include cement, vegetable oil, poultry products (chicken, eggs and turkey), Indian incense, margarine, palm kernel, tinned fish in sauce (Geisha, Sardines), cold rolled steel sheets, wheelbarrows, head pans, metal boxes, galvanized steel, roofing sheets and containers, and enamelware.
Others include wire mesh, steel nails, wire rods, security wire, steel drum, steel pipes, wood particle and board, wood fibre boards and panel, toothpicks, glass and glassware, kitchen utensils, tableware, tiles and wooden fabrics, plywood board and panel, wooden doors plastic and rubber products, soap and cosmetics.
The latest strategy is expected to make the prices of the listed items to rise in the market as importers of the items will now source for foreign currencies on the street market also known as black market.