The importation of 43 items was previously prohibited by the Central Bank of Nigeria (CBN) due to foreign exchange constraints.
A significant change in the bank’s foreign exchange market policy, according to a statement released on Thursday, October 12 by Dr. Isa AbdulMumin, director of corporate communications.
Importers are now permitted to participate in the Nigerian Foreign Exchange Market to purchase foreign currency for their transactions, in contrast to the 2015 Circular referenced as TED/FEFPC/GEN/O1/010 and its addenda which prohibited importers from doing so for 43 specific items.
Rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, and vegetables and processed vegetable products were among the 43 items for which the Central Bank of Nigeria (CBN) had placed restrictions on access to foreign exchange from the FX market as of October 2021. Poultry and processed poultry products, tinned fish in sauce (Geisha) and sardines, cold-rolled steel sheets, galvanized steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes and containers, enamelware, steel drums, steel pipes, wire rods (deformed and not deformed), iron rods, and reinforcing bars are some additional items.
The list also included 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, tableware, and ceramic and vitrified tiles.
The list also included items like Piston crowns, Ball bearings, High voltage cables, Transformers/switch gears, Gas cylinders, Woven fabrics, Clothes, Plastic and rubber products, Polypropylene granules, Cellophane wrappers and bags, Soap and cosmetics, Tomatoes/tomato paste, and purchases of Eurobonds/foreign currency bonds/shares.
AbdulMumin said in the statement that the CBN is actively addressing the backlog of foreign exchange transactions that is currently in place and that it is currently involved in ongoing discussions with various stakeholders to find solutions and facilitate the clearance of this backlog.
A long-term objective of the CBN, according to him, is to create a single foreign exchange market by streamlining and simplifying the Nigerian FX market. He continued by saying that the CBN is consulting with various market players to work toward achieving this objective, which would result in a more unified and effective foreign exchange market in the nation.
To ensure that market forces determine exchange rates in accordance with the Willing Buyer-Willing Seller principle, the Central Bank of Nigeria (CBN) will continue to encourage orderliness and professional conduct by all participants in the Nigerian Foreign Exchange Market.
The CBN reiterates that in order to encourage price discovery, transparency, and credibility in the FX rates, the current Foreign Exchange (FX) rates should be referred to from platforms like the CBN website, FMDQ, and other recognized or appointed trading systems.
The CBN will occasionally intervene in the Nigerian Foreign Exchange Market to increase liquidity as part of its duty to ensure price stability.
These CBN interventions will gradually decrease as market liquidity increases.
The 2015 Circular referenced TED/FEFPC/GEN/O1/010 and its addenda previously prohibited imports of 43 items, but importers of all 43 items are now permitted to buy foreign currency on the Nigerian Foreign Exchange Market.
The CBN is committed to quickening the process of clearing the FX backlog with current participants and will keep talking to stakeholders about the problem.
The establishment of a single FX market is one of the CBN’s objectives.
To accomplish this goal, ongoing consultation with market participants is being conducted.
The aforementioned is to serve as guidance for participants and members of the public.
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