Reps invite CBN governor over lifting of FX restriction on 43 items

On Tuesday, the House of Representatives made a unanimous decision to extend an invitation to the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, in response to the CBN’s recent move to remove restrictions on the supply of foreign exchange for 43 imported items. This resolution came following the adoption of a motion by Representative Sada Soli (APC-Katsina state) during the plenary session.

Among the 43 items affected by this decision are rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, poultry and processed poultry products, tinned fish in sauce (Geisha)/sardine, cold rolled steel sheets, galvanized steel sheets, and more.

Soli, while presenting the motion, highlighted that the CBN had originally imposed these restrictions in June 2015 with the aim of safeguarding foreign exchange reserves and promoting domestic production of specific goods, including around 11 food items. However, on October 12, the CBN announced the removal of FOREX restrictions on these 43 items, some of which had tariffs in place to protect local industries and were part of the import prohibition list.

Soli expressed concerns that the CBN’s decision could significantly impact the local production of essential items like rice, cement, and palm oil, among others. He argued that this could lead to the closure of local manufacturing facilities and ultimately undermine the country’s capacity to bolster its domestic economy.

The lawmaker pointed out that nearly all of the 43 items in question come from two critical sectors identified in various policy documents as essential for economic diversification. He was worried that some of these listed items enjoyed substantial subsidies from their countries of origin, putting Nigerian products at a disadvantage and potentially resulting in job losses and social exclusion.

Soli also expressed concerns about the CBN’s claim that the removal of restrictions would lead to cheaper imported inputs, as he believed this could give undue advantages to intermediaries, hampering economic growth and not aligning with the current unified FOREX market in the country.

He further raised the issue of Nigeria’s competitiveness within the African Continental Free Trade Area, emphasizing that the influx of imported finished goods into the domestic market could be detrimental.

Soli concluded by underlining the urgency of addressing rising food inflation, which has had a significant impact on the country’s economy and the purchasing power of its citizens. He argued that removing FOREX restrictions on these 43 items might not meaningfully address the issue due to the escalating exchange rates.

In his ruling, the Speaker of the House, Representative Tajudeen Abbas, invoked Section 8 (4) (a) (b) and Section 5 (b) of the CBN Act, 2007 to mandate the Committees on Customs and Finance to engage with the CBN governor and seek an explanation for the decision.