By Augustine Aminu
The House of Representatives has invited the governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso over the decision of the apex bank to lift FOREX restrictions on 43 items.
The house also urged the Central Bank of Nigeria (CBN)to engage with other stakeholders within the fiscal ecosystem on the recent decision to lift FOREX restrictions on 43 items.
It equally advised the apex bank to develop a system that will engender professional conduct by all key players in the Nigerian Foreign Exchange Market to guarantee market forces determine exchange rates on a Willing Buyer-Willing Seller Principle.
The House resolutions was taken following the adoption of a motion of urgent national importance sponsor Hon. Sada Soli (APC, Katsina).
It warned the CBN to desist from market suppression tendencies with regards to I & E Window.
Presenting the motion, Hon. Solo noted that the CB imposed the restrictions in June 2015 to conserve the foreign exchange reserves and promote local production of certain goods, including about 11 food items.
He said on October 12, 2023, the CBN announced, among other issues, the lift on FOREX restrictions hitherto placed on 43 items.
“Further notes that some of the items have tariffs to protect local industries, as they are part of the imports prohibition list;
“Concerned that the decision of the CB will greatly affect local production of items such as rice, cement, and palm oil among others, as it will force local manufacturers to hold the short end of the stick, invariably leading to factory closure and ultimately eroding our capacity to build the country’s local economy.
“Aware that almost all the 43 items are from two critical sectors which have been identified by all policy documents from NEEDS, SEEDS to Vision 2022 as being areas that are critical to economic diversification;
“Worried that some of the listed items enjoy 60%-70% subsidy from their countries of origin, thus putting Nigeria’s local products at a comparative disadvantage and without any protection, and will lead to job losses and social exclusion;
“Also worried that the benefit of the cheaper imported inputs as stated by the CBN will give undue advantage to middlemen to drive the economy, which is inimical to our economic growth and not suitable to the current unified FOREX market in the country”, Solo submitted.
He argued that Nigeria will not be competitive in the African Continental Free Trade Area if our markets are flooded with imported finished goods;
Alarmed that the decision followed the rising food inflation in the country which has significantly impacted the economy and the purchasing power of consumers in the country.
“Cognisant that in reality, the lifting of the FOREX restriction on the importation of 43 items may not have meaningful impact on the rising food inflation as a result of soaring exchange rate”, he stated.
The motion was unanimously adopted.
