The importation of 43 items was previously prohibited by the Central Bank of Nigeria (CBN) due to a foreign exchange restriction imposed by Godwin Emefiele, a former governor of the bank.
In a statement released by Isa AbdulMumin, Director of Corporate Communications, on Thursday, October 12, 2023, the apex bank lifted the restriction.
He claims that the foreign exchange market policy has undergone this significant change.
Importers are now permitted to participate in the Nigerian Foreign Exchange Market to purchase foreign currency for their transactions, in contrast to the 2015 Circular referenced as TED/FEFPC/GEN/O1/010 and its addenda which prohibited importers from doing so for 43 specific items.
The following 43 products had their access to foreign exchange from the FX market restricted by the Central Bank of Nigeria (CBN) as of October 2021: rice, cement, margarine, palm kernel, palm oil products, and vegetable oils; meat and processed meat products; and vegetables and processed vegetable products.
the products made from processed poultry, Sardines and/or fish in sauce tins, sheets of cold-rolled steel, sheets of galvanized steel, Roof coverings, Head pans, metal boxes and containers, wheelbarrows Enamelware, Steel containers, steel pipes, bent and straight wire rods, iron rods, and reinforcing bars.
Wire mesh, steel nails, security and razor fencing and poles, wood fiberboards and panels, plywood boards and panels, wooden doors, toothpicks, glass and glassware, kitchen utensils, tableware, and ceramic and vitrified tiles were also on the list.
Clothing, woven fabrics, and Products made of plastic and rubber, polypropylene granules, cellophane bags, cosmetics, soap purchases of Eurobonds, foreign currency bonds, shares, tomato paste, piston cuffs, rolling bearings, On the list were also high voltage cables, transformers and switch gears, and gas cylinders.
According to AbdulMumin, the CBN is making active efforts to address the backlog of foreign exchange transactions that has built up. The CBN is also currently holding ongoing discussions with a number of stakeholders in an effort to find solutions and speed up the clearing of this backlog.
He continued that the CBN’s long-term objective is to create a single foreign exchange market by streamlining and simplifying the FX market in Nigeria.
According to him, the CBN is consulting with various market players to work towards achieving this objective, which would result in a more unified and effective foreign exchange market in the nation.
AbdulMumin claimed that the CBN periodically injects money into the Nigerian Foreign Exchange Market to increase liquidity in an effort to maintain price stability within the nation.
The frequency and size of these CBN interventions, according to him, will gradually decrease over time as market conditions strengthen and become more stable.
The statement reads: “To ensure market forces determine exchange rates on a Willing Buyer-Willing Seller principle, the Central Bank of Nigeria (CBN) will continue to promote orderliness and professional conduct by all participants in the Nigerian Foreign Exchange Market.”
To encourage price discovery, transparency, and credibility in the FX rates, he said: “The CBN reiterates that the prevailing Foreign Exchange (FX) rates should be referenced from platforms such as the CBN website, FMDQ, and other recognized or appointed trading systems.
The CBN will occasionally intervene in the Nigerian Foreign Exchange Market to increase liquidity as part of its duty to maintain price stability. These CBN interventions will gradually decrease as market liquidity rises.
“Importers of all 43 items previously prohibited by the 2015 Circular TED/FEFPC/GEN/O1/010 and its addenda are now permitted to buy foreign currency in the Nigerian Foreign Exchange Market,” he continued.
“The CBN is committed to stepping up efforts with current participants to clear the FX backlog and will continue consultation with stakeholders to address the issue.”
The creation of a single FX market is one of the CBN’s objectives. To accomplish this goal, ongoing consultation with market participants is taking place. The aforementioned is to serve as a guide for participants and the general public.