The Nigerian naira could be facing additional pressure as federal government prepares to announce its final decision on the 41 items the Central Bank of Nigeria restricted from assessing foreign exchange at the interbank market.
MetroBusinessnews had exclusively reported that Buhari and his Economic Management Team were under pressure from the organized private sector, international community and even within government circle to commence a review of the list.
MetroBusinessnews gathered that the decision will be announced by President Muhammadu Buhari as he unveils the much awaited Nigeria’s Economic Recovery and Growth Plan (NERGP) on return from the 10 days medical vacation.
“The review of the list is part of the Economic Recovery and Growth Plan and the details will be unfolded by the President while launching the plan. That will be as soon as he returns,” Aso Rock officials, told BusinessDay during an enquiry.
Some Organised Private Sector groups like the Manufacturers Association of Nigeria, MAN; National Association of Small and Medium Enterprises, NASME, and the Lagos Chamber of Commerce and Industries, LCCI, consistently pressurize government to review the policy , saying it is hurting the manufacturing sector in a way that could not be easily ignored.
The group stated that 16 of the 41 items in the list were critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity to optimally produce the items.
The policy is been reported to have led to the closure of some companies and the relocation of some major blue chip companies from Nigeria to neighbouring countries culminating in the loss of jobs.
An Aso Rock official has confirmed that, “There is a review currently ongoing on the 41 goods on the CBN forex ban list. They will decide to either cut down on the list or overhaul, but it will be one of the two” A government official told Businessday in November last year.
But Governor of the Central Bank of Nigeria, CBN governor Emefiele has severally indicated apex bank’s unwillingness to review those items. Emefiele argues that most of those items, including rice, cement, margarine, palm kernel/palm oil products/ vegetable oils, meat and processed meat products, vegetables and processed vegetable products, among others, can be manufactured locally if the country put its act together.
CBN’s position is that soft oil prices have pushed Nigeria’s foreign reserves to record low levels settling at $27.6billion as last Thursday according to figures from the CBN. Though FX supply has weakened, demand continues to soar in the largely import dependent economy. The naira further weakened further last week to N500/$ at the black market, but maintained the CBN partially controlled interbank rate to N305.
CBN placed the FX ban on poultry, including chicken, edges, turkey, private airplanes/jets, Indian incense, tinnedfish in source (geisha/sardines), cold rolled steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes and containers,enamelware, steel drums, steel pipes, wire rods (deformed and not deformed), iron rods and reinforcing bars, wire mesh, steel nails,
security and razor wire, wood particle boards and panels, wood fiber boards and panels and wooden doors.
The remaining are furniture, toothpaste, glass and glassware, kitchen utensils, tableware, tiles, (vitrified and ceramic), textiles, wovenfabrics, clothes, plastic and rubber products, polypropylene granules, cellophane wrappers, soap and cosmetics, tomatoes,/tomato pastes and euro bond/foreign currency bond/share purchase.
There are increasing worries that once Africa’s largest economy faces double dilemma of economic contraction worsened by low government revenues.
The government is in the process of finalizing the document which is principally targeted at getting the economy out of recession, getting people back to work, moving the country from a consuming nation to a producing nation, providing an environment for ease of doing business and creating jobs, among others.
Implementation of the plan which has fifty-nine strategies will be driven by strong political will, close partnership and strong collaboration between the public and private sectors (especially in the areas of Agriculture, Manufacturing, Solid Minerals, Services, and Infrastructure), as well as a rigorous implementation plan and an effective delivery unit.
The Ministry of Budget and National Planning said at the weekend that as part of efforts towards carrying the critical sectors along and ensuring a successful development of the Plan,
Vice President Yemi Osinbajo will, on Monday chair a forum where representatives of the Private Sector will actively engage their public sector counterparts on the proposals. “This is expected to enrich the Plan development process,” the statement signed by Akpandem James, Media Adviser to the Budget Minister said at the weekend.
