Central Bank of Nigeria
CBN says 43 banned items policy remains
The Central Bank of Nigeria (CBN) has again asked importers of 43 items to stay away from the official forex market.
This instruction is coming as CBN collapsed all forex segments into the investors and exporters (I&E) window, rendering other official FX windows obsolete
The items are not permitted to be funded from the I & E window, according to the information contained in the Q&A document published by the central bank explaining the new Operational Changes to the Forex Market.
The report is titled “Understanding the Operational Changes to the Forex Market” and it is published on its website.
In the part of the Q&A report which asked “Can the 43 Non-Eligble Items access FX at the I&E window” the response was “The status quo remains on the 43 non-eligible items. The items are not permitted to be funded from the I & E window.”
This confirms the central bank will continue to implement the ban on the 43 items suggesting the government will continue with import substitution as they seek to keep protecting the local market.
Godwin Emefiele was suspended on Friday the 9th of June due to an ongoing investigation carried out by the Tinubu administration. Emefiele has staunchly supported this policy.
Recall that CBN released a circular on June 24th, 2015 detailing that it had banned a list of 41 imported goods and services from accessing the official Nigerian Foreign Exchange Market.
Over the years, the CBN has been modifying this list by including more items and in 2020 added maize/corn, which is a widely-consumed staple food in the country.
In an event five years ago. Godwin Emefiele emphasized why the ban will remain stating that it had led to remarkable success in domestic production of the goods in question. As such, its implementation would be intensified.
“Given the remarkable success that has been achieved in stimulating domestic production of goods such as rice, cassava, and maize, as a result of the restriction placed by the CBN on access to forex for these items, the CBN intends to vigorously ensure that this policy remains in place and additional efforts will be made to block any attempts by unscrupulous parties. I mean both individuals and corporates that intend to find other avenues of accessing forex, in order to import these items into Nigeria.”
Several stakeholders in the economy have called for the ban to be lifted claiming it has done more harm to the economy than good.
Investors in the Nigerian economy are grappling with an aberration of CBN incursion into the trade policy space. Through the instrumentality of its foreign exchange policy, the CBN has created a parallel trade policy, creating even more confusion in the trade policy environment.
The CBN has a foreign exchange exclusion list containing items for which foreign exchange would not be made available for imports. In practical terms, it is the CBN version of an import prohibition list, as the banks would make important documents available for transactions relating to any item on the list. The contention of the CBN was that the items on the list can be sourced locally.
This is an assertion that many stakeholders disagree with. The exclusion list has done more harm than good to the economy. Besides, it is an anomaly to have two parallel import prohibition lists for the same economy.
