House of reps invite Cardoso, others to discuss lifting of FX restrictions on 43 items

The House of Representatives want Yemi Cardoso, Governor of the Central Bank of Nigeria (CBN), and stakeholders to explain the recent decision to eliminate foreign exchange restrictions on 43 products.

After eight years, the Central Bank of Nigeria eased foreign exchange restrictions on 43 importers.

The lower chamber cleared the resolution to call the CBN governor in plenary on Tuesday after Katsina lawmaker Sada Soli sponsored a motion of Urgent Public Importance.

He introduced the motion by noting that the Central Bank of Nigeria (CBN) had imposed limits in June 2015 to preserve foreign exchange reserves and boost domestic production of 11 basic staples.

He noted that on October 12, 2023, the apex bank removed Foreign Exchange restrictions from 43 products.

Soli further noted that some of the items have tariffs to protect local industries, as they are part of the import prohibition list.

The lawmaker said,

• “The decision of the CBN will greatly affect local production of items such as rice, cement, and palm oil among others, as it will force local manufacturers to hold the short end of the stick, invariably leading to factory closure and ultimately eroding our capacity to build the country’s local economy. 
• “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.” 

Backstory 

Nairametrics reported that the Central Bank of Nigeria lifted the ban on 43 items imposed under the Godwin Emefiele CBN era.

This was disclosed in a circular by the apex bank released on October 12, 2023.

According to the central bank, it will also boost liquidity in the Nigerian Foreign Exchange Market and intervene from time to time, stating that interventions will decrease as liquidity improves.

Under the new guidelines, the CBN said it will be championing the ‘Willing Buyer – Willing Seller’ principle, emphasizing its commitment to a market-driven exchange rate system.