The House of Representatives has summoned Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, to explain the decision to lift the forex ban on 43 items.
Cardoso will appear before the House Committees on Regulatory Banking, Finance and Customs.
The Reps passed the resolution to summon the CBN Governor during plenary on Tuesday, following the adoption of a motion of urgent public importance sponsored by Sada Soli, a lawmaker representing Kaita/Jibia Federal Constituency in Katsina State.
reports that the apex bank had on Thursday, October 12, lifted foreign exchange (FX) restrictions on the importation of 43 items.
The CBN had in 2015, restricted access to Forex from the FX market for 43 items including Rice, cement, Margarine, Palm kernel, palm oil products and vegetable oils, Meat and processed meat products and Vegetables and processed vegetable products.
Others included Poultry and processed poultry products, Tinned fish in sauce (Geisha)/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.
Also included on the list were Wire mesh, Steel nails, Security and razor fencing and poles, Wood particle boards and panels, Wood fibre boards and panels, Plywood boards and panels, Wooden doors, Toothpicks, Glass and glassware, Kitchen utensils, Tableware, Tiles-vitrified and ceramic.
Textiles, Woven fabrics, Clothes, Plastic and rubber products, polypropylene granules, cellophane wrappers and bags, Soap and cosmetics, Tomatoes/tomato pastes, Eurobond/foreign currency bond/ share purchases, Piston crowns, Ball bearings, High voltage cables, Transformers/switch gears and Gas cylinders were also on the list.
Indeed, the idea behind forex restriction on the items initially was to manage the scarce forex and protect local manufacturers by making the import of those items quite expensive and unable to compete with locally manufactured products.
However, experts are of the view that the idea behind lifting of FX restriction on the 43 items would reduce the pressure in the black market and increase liquidity through the official route, where exporters would be able to buy and sell forex at the I&E window instead of the unofficial market.
According to the CBN, the decision was aimed at bringing everyone into the Investors and Exporters (I&E) window to attract foreign exchange into the economy.
But Local manufacturers and farmers in the country have expressed fears that the decision is capable of sending many of them out of business. This is even as the fall of the naira is continuing despite the policy by the CBN.
While moving the motion on Tuesday, Soli said the decision may lead to the closure of factories and ultimately erode the nation’s capacity to build the country’s local economy.
He said the decision would leave a negative impact on the Nigerian economy and “middlemen” may take undue advantage of the new policy.
“The importation of the items will give undue advantage to the middlemen,” Soli said, adding that the items are critical to the diversification plan of Nigeria
Contributing to the motion, Jesse Onuakalusi, a lawmaker who represents the Oshodi/Isolo II Federal Constituency of Lagos, proposed that the CBN should reverse the policy until legislative action on the matter is concluded.
His amendment to the motion was, however, rejected when it was put to a voice vote.
Cardoso and other stakeholders are to appear before the House committees on regulatory banking, finance and customs.