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CBN to stop FOREX for goods with local substitutes

CBN to stop FOREX for goods with local substitutes

The Central Bank of Nigeria (CBN), says it will no longer support the importation of items that can be produced in Nigeria with FOREX. This it said in a recent statement credited to the Governor of the apex Bank, Mr Godwin Emefiele who reiterated the new stance.

As Nigeria continued the process of full reopening of the economy, he urged industrial conglomerates to support efforts aimed at growing the economy and returning it to its glory days.

According to a PUNCH report, the governor in a statement by the apex bank said, “The CBN will not support the importation of items that can be produced in Nigeria because the bank could not spend its foreign exchange reserves on what would not boost the economy and generate jobs for Nigerians.”

Emefiele said this during a virtual meeting with chief executive officers of conglomerates in Nigeria.

He said in line with the Federal Government’s desire, it was determined to return the Nigerian economy to the period when the manufacturing and agricultural sectors formed the mainstay of the economy.

The CBN governor, while acknowledging the challenge of low oil prices to major economies of the world, expressed confidence that the price of crude would not remain at low levels for a long period.

He emphasised that the low oil price challenge was surmountable, just as he declared that Nigeria’s foreign reserves of about $37bn remained robust to support the economy.

Emefiele enjoined the conglomerates to key into the current administration’s drive of diversifying the base of the Nigerian economy by taking advantage of its large population to market their products, which he insisted could be produced in the country and exported to the rest of the world.

He also pledged the bank’s willingness to provide foreign exchange to companies that required such raw materials and machines that could not be obtained in Nigeria.

With the African Continental Free Trade Area billed to commence in January 2021, Emefiele said Nigeria provided the companies with immense opportunities to produce their items and make huge profits through the Nigerian market, which he noted was large enough to support their respective businesses.

Stressing the need to prioritise the Nigerian market, the CBN governor assured the companies that the bank would collaborate with the relevant government agencies to help nip smuggling in the bud, while also promising to protect their businesses to ensure they succeeded in Nigeria.

He assured the CEOs of the bank’s willingness to collaborate with other fiscal authorities to improve on their ease of doing business in Nigeria, with a view to simplifying their import and export processes.

On the issue of direct foreign investments, Emefiele said the bank was not opposed to the conglomerates seeking alternatives but legitimate sources of foreign exchange to boost their businesses.

He also said the CBN would not hinder the companies from repatriating their dividends.

 

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