By Patrick Aigbokhan
The Federal Government has indicated it’s final resolve to stop importation of 41 items for which local firms cannot get hard currency from the Central Ban of Nigeria (CBN).
Vice President Yemi Osinbajo, who made this known on Tuesday, noted that trade policy-driven curbs on access to hard currency, will be the focus of the government.
The Vice President indicated that there was “light at the end of the tunnel” for Nigeria, which is undergoing its first recession in a quarter of a century.
It would be recalled, the 41 items’ restriction from the official foreign exchange window by the Central Bank of Nigeria (CBN), was introduced in 2015 by to support the naira after it was stalled by a fall in oil prices. The policy has however led to the closure of plants in various sectors, as they have been unable to import the raw materials or spare parts they need to stay in production.
In a statement by the presidency, Osinbajo said the government instead plans to switch to “more trade policy-driven restrictions, taking into account those items that are required and locally unavailable raw materials,”.
He explained that, in stabilizing the macro-economic environment, the government has focused on aligning fiscal with monetary policy and nudging the CBN towards the objective of more market-determined exchange rates.
The major oil producer has suffered from dollar shortages due to a fall in oil revenues, affecting both the public finances and the country’s foreign reserves.
The central bank is running a system of multiple exchange rates that has confused investors, all in a bid to avoid having to devalue its currency again,.
The naira was quoted weaker on Tuesday at an investor trading window, at 380.31 per dollar, data from market regulator FMDQ OTC Securities Exchange showed. The official market rate was 305.85 while on the black market a dollar fetched 390 naira.
Key industry stakeholder are already skeptical whether the central bank can sustain such sales. The convoluted exchange rate system masks pressure on the naira with the regulator trying to avoid a devaluation.