CBN’s Forex Restriction Boosts Domestic Production Of 41 Items

Mr. Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), revealed on Friday that manufacturers of 41 locally produced goods have recorded profits and major growths due to the Bank’s restriction of Foreign Exchange against importers of the items.

Speaking at the 2017 Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, Emefiele said the country equally recorded a reduction in its import bill as a result of CBN’s Forex restriction.

“As a means to controlling the drain on reserves, we adopted demand management through the restriction of FX for imports of goods that can be produced in Nigeria. We established a decisive withdrawal of the de facto subsidy for the importation of 41 non-essential commodities with unfolding successes,” said the CBN governor.

Emefiele said regardless of the opposition to CBN’s restrictive policy stance on the 41 items, Nigeria’s import bill had dropped from about US$5.5 billion monthly to US$2.1 billion in 2016 and US$1.9 billion by mid 2017.

“When we introduced a policy restricting 41 items from our FX markets, we were called all manners of names. Today ladies and gentlemen, among the benefit of that policy is the considerable decline in our import bills. From an average of about US$5.5 billion, our monthly import bill has fallen consistently to US$2.1 billion in 2016 and US$1.9 billion by half year 2017. This is indeed commendable.”

“These are clearly verifiable successes of government’s attempts to create jobs locally, improve the wealth of our rural population, improve industrial capacities and ultimately attain economic growth in Nigeria,” he noted.

On Nigeria’s exit from recession, Emefiele expressed delight that the Nigerian economy had recorded positive growth after five consecutive quarters of negative growth, indicating the country’s exit from the downturn.

He also expressed gladness at the Naira’s appreciation from over N500/US$1 to about N360/US$1, resulting from the Bank’s establisment of the Import and Export Window.

The governor added that “Our reserves have recovered significantly from a low of just over US$23 billion in October 2016 to over US$34.3 billion as of 18 November 3, 2017. The accretion in reserves does not only reflect increased inflow but also our shrewd FX demand management strategy.”