Any firm found smuggling into the country goods for which access to
foreign exchange (forex) has been restricted will have its bank accounts
closed, the Central Bank of Nigeria (CBN) warned yesterday.
The apex bank curbed access to dollars in 2015 for firms importing 42
items, ranging from rice and soap, to private jets and Indian incense
in a bid to conserve foreign reserves and diversify the economy.
It added one item to the list last year.
“Once we discover that people are using illicit foreign exchange to
import those items into Nigeria and smuggle them through the borders …
we have every right to close their accounts,” the apex bank told
Reuters.
President Muhammadu Buhari has made boosting the agricultural sector a
key priority to cutting import bill. In April, the government announced
plans to double manufacturing output to 20 per cent of Gross Domestic
Product (GDP) within six years.
The President was inaugurated for second term on May 29, weeks after re-appointing CBN Godwin Emefiele for a second term.
Emefiele’s reappointment signalled policy stability and broke a trend of Nigerian central bankers serving a single term.
After introducing currency restrictions in 2015, the apex bank
introduced a multiple exchange rate regime which has masked pressure on
the currency and helped to keep it stable.
Emefiele said the bank had been developing home-grown policies to surmount challenges that confronted the economy lately.
He said: “As I have always emphasised, it is our collective duty to
ensure that the potential and prospects of the economy are optimally
realised.
“The ongoing economic recovery requires the joint efforts and wise
counsel of everyone, if we must take giant strides forward. The CBN is
more determined now than ever to remain at the forefront of efforts to
ensure that the rebound is not overturned.”
Speaking at a meeting with bankers in Lagos on the theme:
“Strengthening the economic recovery process in Nigeria”, the CBN boss
said: “With regards to over-dependence in imports, the economic
recession triggered mainly by the drop in crude oil prices, only
strengthened the case for moving from a nation wholly dependent on
consumption, to a nation that produces a large proportion of what it
needs, particularly in areas where the resources needed for production
are widely available across the country.
“This thought process, he said, shaped decision to impose the
restriction on access to forex for 43 items that can be produced in
Nigeria.
“There has been considerable discourse particularly on whether the
restriction on access to foreign exchange for 43 items is driving local
production, with some nay-sayers stating that it has constrained
productivity and growth in the economy.
“Based on our internal research conducted at the Central Bank of
Nigeria, there is strong support that the recovery of our economy from
the recession may have been much weaker or even negative, without the
implementation of the restriction on 43 items.
“Our research supports the conclusion that the combination of the
restriction on 43 items along with other measures imposed by the fiscal
and monetary authorities has helped to promote the recovery.
“Any attempt to reverse the course of this action may have untold
consequences on the growth trajectory of our economy particularly in our
push to diversify and restructure our economy. In fact, recommendations
are being made to the CBN that the list of 43 items be expanded to
include other additional items that can be locally produced.”
Emefiele said many entrepreneurs were taking advantage of this policy
to venture into the domestic production of the restricted items with
remarkable success and great positive impact on employment.
He said: “The dramatic decline in our import bill and the increase in
domestic production of these items attest to the efficacy of this
policy. Noticeable declines were steadily recorded in our monthly food
import bill from $665.4 million in January 2015 to $160.4 million as at
October 2018; a cumulative fall of 75.9 per cent and an implied savings
of over $21 billion on food imports alone over that period.
“Most evident were the 97.3 per cent cumulative reduction in monthly
rice import bills, 99.6 per cent in fish, 81.3 per cent in milk, 63.7
per cent in sugar, and 60.5 per cent in wheat.”
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