MAN takes swipe at CBN’s reversal of Forex ban on 43 items

The Manufacturers Association of Nigeria (MAN) has expressed concern about the Central Bank of Nigeria’s (CBN) recent lifting of foreign exchange (FOREX) restrictions on the importation of 43 items, claiming that the move will harm the economy.

Recall that the House of Representatives had on Tuesday summoned the CBN Governor, Yemi Cardoso, to appear before it over the lifting of the FOREX ban on 43 items.The apex bank had lifted the ban on importers of 43 items restricted from accessing foreign exchange on its official platform

Vice President of MAN, South-West Zone, Dr. Kamoru Yusuf who reacted  to the CBN action said in an interview with newsmen in Ilorin, the Kwara State capital in North Central Nigeria described the policy as an economic somersault, adding  that the country’s major economic problem is the disparity between demand and supply in the foreign exchange market.

Yusuf said, “I want the federal government to know that the major problem at the moment is the demand that is higher than the supply in the FX market. Therefore, reversal of the 43 items is a policy summersault which is dangerous to our nation’s economy.”

He claimed that the majority of financial institutions are completely bewildered and that, should this policy not be swiftly changed, it may cause some banks to experience difficulties at a time when widespread job losses are imminent. He therefore requested that the CBN consult with each Nigerian bank on the matter.

The industrialist offered the following recommendations for the future: the Apex Bank and the Federal government should closely monitor the free trade zone, customs services, mining, and steel industries.

He said, “Part of the possible solution is the immediate review of the policy surrounding the free trade zone in Nigeria which had been abused seriously and which adds little or no value to our economy in generating FX.

“Government needs to investigate and harvest the comprehensive list of the companies who register under the free trade zone inclusive of the value of their investments.

“It is observed that 60% of the goods coming into the country from Asia continents are finished products which can be valued around USD800 million of which some of them are substandard.

“As a result of this ,the Nigeria Customs Service is losing about N300 billion which was supposed to be generated through Duty Revenues every month which some of the aforementioned products were imported under the disguise of the free trade zone.

“Moreover, the law governing the Free Trade Zone prevents Federal Inland Revenue(FIRS) from generating taxes on all the goods brought in through the Free Trade Zones.

“It is worthy to note that these goods will be sold in naira and the importers want to repatriate the money back to their country in dollars and they have no other source of getting the money than to go to the black market window because the goods were brought into the country “dishonestly”.

“Therefore, they can afford to buy the dollar at any rate because they already have export rebates from their country for the finished goods exported to Nigeria.

He therefore advised President Asiwaju Bola Ahmed Tinubu to give the Minister of Trade and Investment the mandate to appoint an agency to look into the statistics and number of companies registered under free trade zone.

The Industrialist also recommended that President Tinubu should order the Nigeria Customs Service which has a robust platform to submit the list of importers who have been bringing goods into the country in the name of free trade zone and their respective value(s) since 2018-till date in order to justify the amount they have repatriated out of Nigeria in the name of Free Trade Zone without payment of duty or any form of taxes to Nigerian government.

Recall that the Central Bank declared in June 2015 that about forty-one items were “Not Valid for Foreign Exchange” since they could have been made in Nigeria with ease as opposed to being imported.

Rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and meat products processed, vegetables and vegetable products processed, poultry, tomatoes and tomato paste, soap and cosmetics, and clothing are a few of the items impacted.

Additional items include head pans, wheelbarrows, enamelware, steel drums and pipes, wire mesh, steel nails, wood particle boards, panels, Indian incense, canned fish in sauce, cold rolled steel sheets, galvanized steel sheets, roofing sheets, and private aircraft and jets.

Equally affected were security and razor wire, wood particle and fiber boards and panels, wooden doors, furniture, toothpicks, glass/glassware, kitchen utensils, tableware, tiles (vitrified, ceramics), textiles, wooden fabrics, plastic/rubber products, polypropylene granules, and cellophane wrappers.

The apex bank subsequently added fertilizer and maize/corn to the list of banned items.

However, it was noted that the CBN’s decision to lift the ban on the 43 items signifies a major step in resolving the country’s forex crisis.

The move, according to the apex bank, is part of the Nigerian government’s efforts to improve liquidity and stability in the market and attract foreign investors into the Nigerian economy.

Although the policy was widely applauded as well-intentioned and necessary, it has put additional pressure on the local currency and manufacturers, with ripple effects on domestic prices.