The Nigerian Presidency is currently reviewing the list of 41 items which the Central Bank of Nigeria (CBN) banned last year from assessing the official foreign exchange window for their import- obviously bowing to mounting pressure from manufacturers and the Organised Private Sector.
BusinessDay is reliably informed that high level meetings have been holding on the matter and that government’s intention is to review the list downwards or even totally overhaul it.
A senior government official, speaking off the record, told our reporter that:“There is a review
currently ongoing on the 41 goods on the CBN foreign exchange ban list. They will decide to either cut down on the list or overhaul, but it will be one of the two”.
Nigeria’s Central Bank had last year issued a directive banning 41 goods and services from the list of items valid for foreign exchange from the CBN dollar window.
CBN governor, Godwin Emefiele, in announcing the policy had argued that most of those items, including rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, vegetables and processed vegetable products, among others, can be manufactured locally, if the country sets its mind to it.
“Importers who still want to continue to import these items will have to source the dollars from their private sources,” Emefiele had insisted.
But there has been mounting pressure from the Organised Private Sector (OPS), the international community, as well as analysts, for the Federal Government to review the policy which the CBN insists would help preserve the fast depleting foreign reserves and also save local manufacturing.
The Nigeria Customs Service (NCS) said in April, that it lost N230 billion in anticipated revenues in the last quarter of 2015 due to the CBN’s closure of the foreign exchange window to the 41 banned items.
The Comptroller-General of Customs, Hameed Ibrahim Ali, disclosed then, that he had opened talks and made a request for a policy review to Vice-President Yemi Osinbajo.
Christine Lagarde, managing director of the International Monetary Fund (IMF) also raised the issue in April, during her official visit to Nigeria, warning that the restrictions on the 41 items was making an already bad situation worse in the foreign exchange market.
“We believe that a more flexible exchange rate will be more efficient than to have a list of products that are barred from being imported into the country.”
Some of the goods and services excluded from accessing dollars from the CBN window include; poultry, including chicken, eggs, turkey, private airplanes/jets, Indian incense, tinned fish in sauce (sardines), cold rolled steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes and containers, enamelware, steel drums, steel pipes, wire rods (deformed and not deformed), iron rods and reinforcing bars, wire mesh, steel nails, security and razor wire, wood particle boards and panels, wood fiber boards and panels and wooden doors.
Others are furniture, toothpaste, glass and glassware, kitchen utensils, tableware, tiles, (vitrified and ceramic), textiles, woven fabrics, clothes, plastic and rubber products, polypropylene granules, cellophane wrappers, soap and cosmetics, tomatoes,/tomato pastes.
Just recently, some Organised Private Sector (OPS) groups, including the Manufacturers Association of Nigeria, (MAN) National Association of Small and Medium Enterprises (NASME) and the Lagos Chamber of Commerce and Industries (LCCI) urged the government to review the policy, as it was hurting the manufacturing sector in a way that could not be ignored.
Calling for an urgent review, the groups stated that 16 of the 41 items on the list were critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity to optimally produce the items.
The OPS said the ban on oil palm had led to the loss of about 100,000 jobs over the past few months, while the ban on glass and glassware had led to the loss of 80,000 jobs, mainly in the pharmaceutical industry, as companies in this sector now find it difficult to package their products.
The policy is also reported to have led to the closure of some companies and the relocation of some other major blue chip companies from Nigeria to neighbouring countries.