The Central Bank of Nigeria, CBN, has ended an eight-year ban on 43 items that had been restricted from accessing foreign exchange, forex, on the official market.
The importers of all the previously restricted items “are now allowed to purchase foreign exchange in the Nigerian foreign exchange market,” Isa AbdulMumin, CBN’s director of corporate communications said in a statement on Thursday.
In 2015, the CBN banned manufacturers and importers of the items from accessing forex from the official market.
At the time, ex-CBN Governor Godwin Emefiele said the restriction would conserve foreign reserves. Rather, it shot up the prices of the items because importers diverted to the black market, fueling a rout in the local currency.
The affected items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, vegetables and processed vegetable products, poultry, tomatoes/tomato paste, soap, cosmetics, and clothes.
Other items include private aeroplanes/jets, Indian incense, tinned fish in sauce, cold rolled steel sheets, galvanized steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes/containers, enamelware, steel drums and pipes, wire mesh, steel nails, wood particle boards, and panels.
Equally affected were security and razor wire, wood particle and fibre boards and panels, wooden doors, furniture, toothpicks, glass/glassware, kitchen utensils, tableware, tiles (vitrified, ceramics), textiles, wooden fabrics, plastic/rubber products, polypropylene granules, cellophane wrappers, fertilizer and maize/corn.
With the restriction lifted, importers of these items can now freely purchase forex from the official window at ‘cheaper rates’.
The CBN’s decision to relax the ban is touted as a market-friendly step in resolving the country’s forex crisis.
The naira has been weakening on the black market as demand continues to regularly exceed supply. Street traders are selling at N1045/1$, a wide gap with the official market rate of N776/$1, where restrictions on trading the currency were lifted in June.
“As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time,” AbdulMumin added, “As market liquidity improves, these CBN interventions will gradually decrease.”