The Centre for the Promotion of Private Enterprise says the Central Bank of Nigeria’s decision to lift its foreign exchange exclusion policy on 43 items is the right move.
Muda Yusuf, the Director of CPPE, disclosed this in a statement on Tuesday.
DAILY POST reports CBN on Thursday said it has lifted the forex restriction on 43 items.
CPPE said the forex restriction policy on the 43 items had contributed to the distortion in the sector.
Meanwhile, the economic think-tank group urged that the CBN monitor the import surge risk following the development.
“We welcome the decision of the CBN to discontinue the forex exclusion policy on the 43 items. It is a move in the right direction. It is part of the policy normalisation process.
“The exclusion of the 43 items was one of the several drivers of distortions in the forex market. The exclusion of the items also contributed to the persistent divergence in rates between the official window and the parallel market. The exclusion also conflicted with extant trade policy as the items were not under import prohibition in the first place. It was an example of a lack of policy coordination under the previous administration.
“The new directive will also improve transparency and disclosures in foreign exchange transactions.
Meanwhile, the CBN should avoid market suppression tendencies, especially outside the I and E window. All policy impediments to forex inflows should be removed.
“Meanwhile, the fiscal authorities should continually monitor the economic landscape to shape the character of fiscal policy measures to regulate imports in line with comparative advantage principles. We need to worry about the risk of an import surge. There is also a need to upscale the use of fiscal policy measures to boost domestic production and productivity”.
DAILY POST recalls that in 2015, the CBN banned 43 items, such as rice, cement and poultry, from accessing forex.
