CBN May Increase Items On Forex Restriction List

CBN Wants More Items Included In Forex Ban List

Indications have emerged that the Central Bank of Nigeria may soon increase the items on the foreign exchange restriction list from the current 42.

This was disclosed on Saturday by the Governor, Central Bank of Nigeria, Mr Godwin Emefiele, during an inspection of the refinery being built by Dangote Group at the Lekki Free Trade Zone in Lagos state.

The step, he said is targeted at boosting local production and stimulate the export market.

Naija News recalls the CBN had in recent years placed restriction on access to forex for 41 items in order to support the production of goods that can be produced locally such as rice, tomatoes, and palm oil for domestic and the export market.

But in December 2018, the CBN included fertiliser, thereby increasing the items on the forex restriction list to 42.

The items on the ban list include cement, margarine, meat and processed meat products, private airplanes/jets, roofing sheets, wooden doors, toothpicks, textiles, soap and cosmetics.

Commenting on the Dangote refinery project, Emefiele noted that the project keyed into the objectives of President Muhammadu Buhari’s administration which include conserving forex and diversifying the economy.

He said, “To put it in proper perspective, by the time you dimension the size of the foreign exchange we use in importing petroleum products into the country, it is at least one third of the foreign exchange the CBN spends to import items into Nigeria today.

“By the time we add also the 42 items that we have, which certainly we are going to increase from 42 may be to 50 or more in due course because we are going to get more aggressive in ensuring that more and more food items that are being imported into this country are added into the FX restriction list.

“I am saying that by the time we add the savings from the production and export of petroleum products; by the time we also add the foreign exchange that we spend on food items, close to 55 or 60 per cent of what the CBN or what the government spends in funding its foreign exchange operations will be saved in the country.”

Speaking further, Emefiele also said that the CBN had supported the Dangote refinery project with N75bn.

“This (Dangote refinery) is a $9bn project that is being funded not only by Nigerian banks but also by foreign banks.

“The Central Bank of Nigeria itself is contributing close to about N75bn in supporting this project. N75bn is just a drop compared to about $9bn that this project costs.

“By the time this refinery is completed, it will not only service the needs of our domestic economy but shore up our international oil investments.”

“I have not seen any licensee approach the bank for credit to build refinery.

“Remember, such licensee will approach his bank, which will in turn assess his capacity to build such a refinery and such a request will be forwarded to the CBN for approval.

“If they have the capacity, we will support them through their banks,” Emefiele said.

In his remarks during the visit, the President of Dangote Group, Aliko Dangote, said the refinery would commence operations in April 2020 and reduce forex depletion in the country.

He said, “The projects will make Nigeria to become the largest exporter of fertilisers in Africa, largest exporter of petrochemicals and biggest exporter of refined petroleum products in Africa. Our gas pipeline project will transport three billion standard cubic feet per day of gas.”

“The refinery is going to save a huge amount of foreign exchange outflow because, today, forex is being used in the importation of petroleum products and our foreign reserves are being heavily depleted.”