A member of the House of Representatives, Sada Soli, has expressed concerns that the Central Bank of Nigeria’s (CBN) recent decision to lift the ban on foreign exchange for 43 items may negatively impact the local economy. Soli issued this warning during a session on the floor of the House of Representatives on Tuesday.
Contrary to Soli’s apprehensions, the Nigeria Employers Consultative Forum (NECA) holds a different perspective on the matter. NECA clarified that the 43 items were not banned for import in 2015; instead, foreign exchange restrictions were imposed on them. This placed pressure on the foreign exchange market. NECA believes that the new CBN policy will benefit the nation by alleviating this pressure.
In response to the ongoing debate, the House has invited the Governor of the CBN, Yemi Cardoso, to appear before them. This summons comes following the CBN’s unexpected decision to lift the foreign exchange ban on a range of items, including fertilizer, cement, toothpick, and 40 others. These items were originally restricted from accessing forex at the official market rate back in 2015.
The CBN’s decision to lift the ban has arisen in the context of high volatility in the foreign exchange market due to the consolidation of all trading windows into the investors and exporters’ window, a move by the government to streamline the FX market.
The CBN, in a statement issued by its Director of Corporate Communications, Isa AbdulMumin, reiterated the importance of referencing FX rates from recognized platforms to promote transparency and credibility in the FX rates.
During the plenary session on Tuesday, the House passed a resolution to summon the CBN Governor in response to a motion of urgent public importance introduced by Sada Soli. Soli, who represents Jibia/Kaita Federal Constituency, Katsina State, expressed concerns about the CBN’s decision, fearing potential factory closures and adverse effects on the local economy.
Some lawmakers, including Jesse Onuakalusi, called for an immediate reversal of the policy until the House had completed a legislative review of the matter. However, this proposal was not adopted.
In the end, an amendment to the motion was made by Kingsley Chinda, who represents Obio/Akpor Federal Constituency, Rivers State. It was agreed that the CBN Governor should appear before the House Committee on Regulatory Banking, Finance, and Customs to explain the rationale behind the lifting of the ban.
Experts and stakeholders hold varying opinions on the matter. Niyi Yusuf, Chairman of the Nigerian Economic Summit Group, emphasized the limitations of using monetary policies to address trade issues and called for improving the competitiveness of the manufacturing industry through appropriate policies.
Wale Oyerinde, Director-General of the Nigeria Employers Consultative Association, viewed the lifting of restrictions on the purchase of forex for the 43 items as a double-edged policy decision. He recognized the gradual shift towards investment in local alternatives but noted the pressure it placed on the forex market.
Dr. Friday Okpara, Director at the Small and Medium Enterprises Development Agency of Nigeria, suggested that the lifting of the ban was of limited significance since the items were not banned but rather excluded from the CBN official forex window. The scarcity of forex remains a challenge.
Salihu Imam, Chairman of the Oyo State Chapter of the Agricultural Development Farmers Association, called for comprehensive support for local industries to promote self-sufficiency and exports. He criticized the government’s tendency to resort to panic measures and suggested a more strategic approach to economic development.