The Centre for the Promotion of Private Enterprise (CPPE) released a statement on Thursday applauding the Central Bank of Nigeria (CBN) for putting an end to its forex exclusion policy that restricted 43 items from accessing foreign currencies from it.
The CBN had on Thursday announced the discontinuation of a policy that restricted importers of rice, cement, meat and processed meat products, margarine, and 39 other items from accessing forex from it.
The apex bank policy reversal had generated reactions on conventional and social media, as some feel the relaxation of such a policy could help in the CBN’s drive to arrest the slump in the Nigerian currency, the naira. The naira, as of Thursday morning, was traded at N1,045 to a US dollar in the street market.
In the statement made available to BusinessDay, CPPE said that this CBN forex policy reversal was a move in the right direction, admitting that it would help normalise the forex market.
The statement read, “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.”
CPPE added that the forex exclusion policy was in direct conflict with the “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.”
It added that this policy reversal from the CBN will help “improve transparency and disclosures in foreign exchange transactions.”
CPPE, however, advised the apex bank to avoid “market suppression tendencies, especially outside the I and E windows,” urging it to ensure that all policy impediments to forex inflows be removed.
It also advised the nation’s fiscal authorities to “continually monitor the economic landscape to shape the character of fiscal policy measures to regulate imports in line with comparative advantage principles.”
Another important piece of advice was for the nation to ensure that this forex policy reversal doesn’t result in an influx of imported items into the country and also to ensure that this policy boosts domestic production and productivity.