In a question-and-answer report released on Friday, the 16th of June 2023, the CBN clarified certain aspects of the new exchange rate policy. According to one of the responses, the central bank clarified the unchanged status of the 43 non-eligible items banned from the forex market, which were introduced under the leadership of Godwin Emefiele.
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The question was: CAN THE “43 NON-ELIGIBLE ITEMS” ACCESS FX AT THE I&E WINDOW?
What the CBN said: “The status quo remains on the 43 non-eligible items. The items are not permitted to be funded from the I & E window.”
It should be noted that on June 23rd, 2015, the Central Bank of Nigeria made a significant announcement through a circular, stating that it had implemented a ban on a comprehensive list of 41 imported goods and services from accessing the official Nigerian Foreign Exchange Market. Throughout the years, the CBN has been continually updating and expanding this list, incorporating additional items. In 2020, one notable inclusion was maize/corn.
The move by the CBN in 2015 was one of the moves made by the previous administration to drive import substitution in the country. According to the circular released by the CBN at the time, “the implementation of the policy will conserve foreign reserves as well as facilitate the resuscitation of domestic industries and improve employment generation.”
Consequently, businesses aiming to procure goods and services in this list will need to resort to accessing the parallel market. And one of the implications is that if there is a higher demand for these items than the country’s production capacity, it could impact the central bank’s efforts to achieve exchange rate stability and bridge the gap between the official and black market rates.
In response to this development, experts and analysts have raised concerns and questioned the feasibility of unifying the exchange rate while certain items remain on the forex restriction list.
In a tweet by financial analyst, Kalu Aja, he noted,
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“This is word speak. CBN was funding banks and thus they banned items. Rice importers thus went to the black market. If banks are now selling $ at the black market rate, then implicitly there is no ban.”
Experts React
