A member of the House of Representatives, Sada Soli, has warned that the lifting of the ban on foreign exchange on 43 items by the Central Bank of Nigeria may ruin local economy.
He gave the warning on the floor of the House of Representatives on Tuesday.
However, the Nigeria Employers Consultative Forum disagreed with the lawmakers on the new CBN policy, saying the importation of the 43 items was not banned in 2015.
It explained that the foreign exchange ban was placed on the items. This, it added, put pressure on the forex market, adding that the new CBN policy would benefit the nation.
The House invited the Governor of the CBN, Yemi Cardoso, to appear before it, following the apex bank’s decision to lift the foreign exchange ban on fertilizer, cement, toothpick and 40 other items.
It had been reported that the 43 items were in 2015 restricted from accessing forex at the official market rate.
CBN’s sudden decision to lift the ban came against the backdrop of high volatility levels experienced in the foreign exchange market owing to the unification of all trading windows into the investors and exporters’ window (the official FX market) by the President Bola Tinubu administration.
It would be recalled that the apex bank had in a statement issued by its Director of Corporate Communications, Isa AbdulMumin, said, “The CBN reiterates that the prevailing Foreign Exchange (FX) rates should be referenced from platforms such as the CBN website, FMDQ, and other recognised or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.”
At a plenary session on Tuesday, the Green Chamber passed a resolution to summon the CBN Governor following the adoption of a motion of urgent public importance sponsored by Soli, a member of the House representing Jibia/Kaita Federal Constituency, Katsina State on the platform of the All Progressives Congress.
Justifying the significance of the motion, Soli said the decision of the apex bank may lead to the closure of factories and ultimately erode the nation’s capacity to build the local economy.
In his words, it was doubtful if the new policy would make any meaningful impact on the Nigerian economy. He said ‘middlemen’ may take undue advantage of it for their own good.
Contributing to the motion, a lawmaker representing Oshodi/Isolo II Federal Constituency, Lagos State, Jesse Onuakalusi, called for the immediate reversal of the policy until the House concluded a legislative action on the matter; a prayer that was rejected by the lawmakers.
An amendment to the motion by Kinglsey Chinda, representing Obio/Akpor Federal Constituency, Rivers State, said 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 was thereafter adopted.
Businesses
The Chairman of the Nigerian Economic Summit Group, said, Mr Niyi Yusuf, said, “Monetary policies cannot be used to tackle trade issues. The competitiveness of our manufacturing industry needs to be improved by using appropriate policies, strategies, tools, and mechanisms. Not every issue can be addressed or solved using monetary policies.”
However the Director-General of the Nigeria Employers Consultative Association, Mr Wale Oyerinde, said, “The lifting of restrictions on the purchase of forex for 43 items was a double edged policy decision.
He said, “It should be noted that the 43 items were never in the prohibition list and thus, were never banned from being imported. Importers of the items only had to source forex from alternative sources, which invariably puts more pressure on the FOREX market.
“While the restrictions helped the gradual investment in local alternatives, it also puts pressure on the forex market, with the potential of widening the gap between the official and parallel market rates. A strategic harmonisation of the fiscal and monetary policies, with inputs from other Ministries could resolve the issues for the benefit of the nation.”
The Director at the Small and Medium Enterprises Development Agency of Nigeria, Dr. Friday Okpara, said, “The items were not banned in the first place. The only thing was that they were not allowed extra then, through the CBN official window. Now that we have a single forex window the lifting of the ban is insignificant.
“Whether it’s been lifted or not, it doesn’t make any impact. There is no forex anywhere to access.”
Meanwhile, the Chairman, of the Oyo State Chapter of the Agricultural Development Farmers Association, Salihu Imam, said, “Ordinarily if you want to protect the industries you ban import.
“We must find ways to protect them. We don’t need all these policies whether it is palliative or what have you because it will all lead to corruption. The government must find ways to support the farmers.
“Commercial banks should give out African loans to farmers at the rate of two per cent annually, they will pay. The move to lift the ban on those 43 items is one of those panic measures.”
He added, “You don’t have any measures on the ground, you are removing the subsidy. This is what the government has been doing for ages, always taking panic actions. In some economies of the world, what they do is to ban importation to allow local industries to thrive, then you export and earn forex,” he concluded.