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
- Palm kernel
- Palm oil products
- Vegetable oils
- Meat and processed meat products
- Vegetables and processed vegetable products
- Poultry and processed poultry products
- Tinned fish in sauce (Geisha)/sardine
- Cold rolled steel sheets
- Galvanized steel sheets
- Roofing sheets
- Head pans
- Metal boxes and containers
- Steel drums
- Steel pipes
- Wire rods (deformed and not deformed)
- Iron rods
- Reinforcing bars
- Wire mesh
- Steel nails
- Security and razor fencing and poles
- Wood particle boards and panels
- Wood fiberboards and panels
- Plywood boards and panels
- Wooden doors
- Glass and glassware
- Kitchen utensils
- Tiles-vitrified and ceramic
- Gas cylinders
- Woven fabrics
- Plastic and rubber products
- Polypropylene granules
- Cellophane wrappers and bags
- Soap and cosmetics
- Tomatoes/tomato pastes
- Eurobond/foreign currency bond/ share purchases
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