Home PoliticsAfrica News EXPLAINER: What CBN’s Lifting Of Forex Ban On 43 Items Means

EXPLAINER: What CBN’s Lifting Of Forex Ban On 43 Items Means

by AfroWorldNews
EXPLAINER: What CBN's Lifting Of Forex Ban On 43 Items Means

The Central Bank of Nigeria (CBN),  on Thursday, October 12, 2023, made news headlines after listing the forex ban on 43 items.

AfroWorldNews understands that the CBN’s forex ban was imposed on the items under former governor of the central bank, Godwin Emefiele‘s watch.

Eight years after the forex ban took effect, the apex bank’s Director of Corporate Communications, Isa AbdulMumin said it has been lifted.

Below are the 43 items on the Forex ban list

  1. Rice
  2. Cement
  3. Margarine
  4. Palm kernel
  5. Palm oil products
  6. Vegetable oils
  7. Meat and processed meat products
  8. Vegetables and processed vegetable products
  9. Poultry and processed poultry products
  10. Tinned fish in sauce (Geisha)/sardine
  11. Cold rolled steel sheets
  12. Galvanized steel sheets
  13. Roofing sheets
  14. Wheelbarrows
  15. Head pans
  16. Metal boxes and containers
  17. Enamelware
  18. Steel drums
  19. Steel pipes
  20. Wire rods (deformed and not deformed)
  21. Iron rods
  22. Reinforcing bars
  23. Wire mesh
  24. Steel nails
  25. Security and razor fencing and poles
  26. Wood particle boards and panels
  27. Wood fiberboards and panels
  28. Plywood boards and panels
  29. Wooden doors
  30. Toothpicks
  31. Glass and glassware
  32. Kitchen utensils
  33. Tableware
  34. Tiles-vitrified and ceramic
  35. Gas cylinders
  36. Woven fabrics
  37. Clothes
  38. Plastic and rubber products
  39. Polypropylene granules
  40. Cellophane wrappers and bags
  41. Soap and cosmetics
  42. Tomatoes/tomato pastes
  43. Eurobond/foreign currency bond/ share purchases

3 Bottles of Bitter Leaf Capsules

What it means…

The forex embargo was first imposed in 2015 with the intention of preserving foreign exchange reserves and promoting domestic manufacturing. The 43 items on the list included a variety of goods, such as textiles, machinery, and even food items. The CBN sought to lessen Nigeria’s dependency on imports and encourage self-sufficiency in important industries by limiting access to foreign exchange for certain goods.

The CBN has acknowledged that, despite its good intentions, the policy had unforeseen repercussions, which is why the FX ban has been lifted. Increased smuggling, a booming underground market for foreign exchange, and a spike in the price of affected commodities were only a few of the negative effects that resulted from it. The prohibition also hampered the growth of the manufacturing and agricultural industries and deterred foreign investment.

The CBN hopes to address these problems and promote economic growth with this latest decision. It is anticipated that the prices of these goods will stabilize and that supply chain disruptions will be reduced by permitting the 43 previously prohibited items to have access to foreign exchange. In the end, this will result in easier consumer access to necessities and possibly lower inflation.

Additionally, the removal of the forex embargo is probably going to boost foreign investment and elevate Nigeria’s profile in the global business world. It conveys the message that Nigeria is willing to improve the business environment and is growing more receptive to foreign investment. This shift has the potential to increase investor confidence and draw in much-needed foreign funding.

This action also fits with larger patterns in international trade. In order to facilitate cross-border trade and spur economic growth, several countries are placing a high priority on economic liberalization and trade barrier reduction. Nigeria is putting itself in a position to benefit from these international trade prospects by granting these 43 commodities access to foreign exchange.

It’s, however, crucial to remember that this policy change’s effectiveness will depend on how it is put into practice. The CBN is responsible for making sure that forex is accessible to everybody, transparent, and does not worsen the volatility of exchange rates. To ensure that local industries can prosper in a more open market, the government should also concentrate on making them more competitive.

Afro World News

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