A financial expert and CEO of SD & D Capital Management, Gbolade Idakolo, has lauded the CBN’s decision to lift the ban on some items from accessing foreign exchange
READ ALSO: CBN lifts FX restrictions on 43 items
The Items on the list include rice; cement; toothpicks; margarine; palm Kernel/Palm oil products/vegetable oils; meat and processed meat products; vegetables and processed vegetable products; poultry – chicken, eggs, Turkey; Soap and cosmetics; tomatoes/tomato pastes; milk; maize and tinned fish in sauce (Gelsha)/Sardines.
Others are enamelware; steel drums; steel pipes; wire rods (deformed and not deformed); iron rods and reinforcing bars; wire mesh; steel balls; security and razor wire; wood particle boards and panels; wood fiber boards and panels; plywood boards and panels; wooden doors; furniture; glass and glassware; kitchen utensils; tableware; tiles – vitrified and ceramic; textiles; woven fabrics and clothes.
These items were banned from from accessing forex through any official channel in 2015 but eight years later, the Yemi Cardoso-led apex bank lifted the ban in a statement signed by director of corporate communications, Isa AbdulMumin.
The statement said, “Importers of all the 43 items previously restricted by the 2015 Circular referenced TED/FEM/FPC/GEN/01/010 and its addendums are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market.
Speaking with Voice of Nigeria, Mr. Gbolade Idakolo, said “decision to lift the restrictions on the 43 items from Forex purchase through the CBN and the normal primary market is a very good decision because previously the importers of these 43 items have been purchasing Forex from the black market which has made the margin to continuously increase even with all the interventions of the Central Bank in the previous years. It has not really allowed the convergence of the exchange rate to be effective and that is why we discover that in other for the exchange rate to converge and for the difference to come together, it is important that restrictions are lifted for purchase of Forex from the primary market for the 43 Items.”
According to him the market has begun to react positively to the decision adding that government’s revenue will also increase as it will increase taxes and excise collection .
“You’ll also discover that immediately these decisions were made, the market has started reacting positively to it and it would also help the economy because the fact is that when you do not allow the proper channels to be taken for some import, we might also loose the revenues that is supposed to be accrue to it so it’d properly enable the Central Bank to put statistics in place and for the revenue collectors to also be able to ensure that Nigeria collects the right taxes and excises on these items when they are imported and it would also make sure that they can channel their request through the Central Bank instead of going through the black market”
The financial expert called on the Apex bank to instill confidence in the market.
“Apart from continuous intervention of the central bank in the market to improve liquidity, the central bank also has to encourage export, in order to get enough currency in the country and there should also be incentives for those that are exporting raw materials, exporting of solid minerals and the rest so that they can continue to bring in the much needed Forex to the economy. Also, the central bank apart from continuous intervention need to monitor all the key players in the sector to ensure that there is adequate compliance and there is no under hand deals going on that could affect the smooth process and smooth running of the forex market. Another aspect that the central bank needs to look into is to ensure that investors are also carried along so that more investors fund can come into the system and it can come and go as it pleases so that the people that are investing in the economy will not feel that their funds will be trapped on the long run just like we are witnessing where airlines are not able to repartrate their funds to their countries. So this measures also are very important to instill confidence in the market apart from intervening to improve liquidity”
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