Conflicting Sentiments Surround CBN’s Forex Ban Reversal

The decision by the new Governor of the Central Bank of Nigeria, Dr. Yemi Cardoso, to lift the forex ban on 43 items has sparked a heated debate among major players in the Nigerian Maritime sector. While some view this move as a positive step for the economy, others remain skeptical about its impact. Infostride News delves into the intricacies of this decision and the various perspectives it has garnered.

On October 12, 2023, the Central Bank of Nigeria made a significant announcement – the ban on forex for the importation of certain items, including rice, vegetable oil, and poultry products, was lifted. This decision was met with a collective sigh of relief from many Nigerians who hoped it would lead to a reduction in the skyrocketing prices of essential goods like rice, which had reached as high as N52,000 per bag before the ban was reversed.

In a statement titled “CBN Restates Commitment to Boost Liquidity in Forex Market,” signed by the Director of Corporate Communications, Isa AbdulMumin, the Central Bank of Nigeria revealed its intention to promote liquidity in the forex market by allowing importers of the previously restricted 43 items to purchase foreign exchange. The statement emphasized the importance of transparent exchange rates and stressed that market forces should determine these rates. The Central Bank also pledged to intervene in the market to boost liquidity when necessary, with the goal of achieving a single FX market.

However, not all stakeholders in the maritime sector are convinced that this decision will have a significant impact. Mr. Lucky Amiwero, the founder of the National Council of Managing Directors of Licensed Customs Agents, expressed his doubts, stating that the reinstatement of forex for these items might not lead to immediate changes. The fluctuating exchange rate is a major concern, as it has the potential to deter importation efforts.

Mr. Amiwero pointed out that, if the exchange rate remains unstable, many individuals may be discouraged from engaging in import activities. He underscored the importance of exchange rate stability for successful importation, particularly in the case of rice, a staple food in Nigeria.

Sikiru Remilekun, a member of the Association of Nigerian Licensed Customs Agents, echoed a similar sentiment. He believes that the lifting of the forex ban on rice imports may not result in substantial changes. Additionally, importers of these commodities could face resistance from local manufacturers who are likely to be unhappy with this development.

Nasiru Salami, the president of the trans-border traders association, identified insecurity and other factors as significant obstacles to Nigerian farmers’ ability to produce sufficient agricultural products. While he acknowledged the importance of reducing imports of goods that can be locally produced, he highlighted the need for viable alternatives. Salami argued that Nigeria-made rice is more expensive than imported options due to challenges such as insecurity and inadequate infrastructure.

Eugene Nweke, a former National President of the National Association of Government Approved Freight Forwarders, took a more positive view. He believed that the removal of the forex ban would enhance forex flexibility and liquidity. Nweke predicted that importers of the 43 items would explore the difference between parallel and official market rates, while foreign manufacturers might consider establishing local production or assembly facilities, leading to increased business activities and forex performance.

Looking ahead, it is evident that addressing the issues related to forex and exchange rates is crucial for importers to fully benefit from the Central Bank’s revised policy. Dr. Boniface Aniebonam, a seasoned freight forwarder and founder of the National Association of Government Approved Freight Forwarders (NAGAFF), made an appeal for the release of seized rice imports and goods held by the Nigeria Customs Service. He stressed the importance of addressing these concerns to ensure the success of the policy reversal.

Aniebonam also commended the current administration for its decision to reverse the previous policies, emphasizing the need for a collaborative effort to address these issues effectively. He suggested granting amnesty to individuals whose goods were seized and advocated for a fair resolution to these cases, including the payment of appropriate customs duties and surcharges.

In conclusion, the lifting of the forex ban on 43 items has generated a range of opinions within the Nigerian Maritime sector. While some stakeholders remain cautious due to concerns about exchange rate stability and competition with local manufacturers, others see this policy reversal as a potential catalyst for economic growth. Regardless of these differing perspectives, there is a consensus that addressing forex-related issues is essential to realizing the full benefits of this decision.