Nigeria: Divergent Opinions Emerge Regarding CBN’s Forex Ban Reversal

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The recent decision by the new Governor of the Central Bank of Nigeria, Dr. Yemi Cardoso, to lift the ban on forex for the importation of 43 items has sparked a lively debate among key players in the Nigerian maritime sector. While some view this move as a step in the right direction, others express skepticism about its potential benefits to the economy. Here, we explore these varying perspectives.

The Central Bank of Nigeria announced the reversal of the forex ban for 43 items, including rice, vegetable oil, and poultry products, on October 12, 2023. This decision was welcomed by many Nigerians who hoped it would lead to a reduction in the price of rice, a staple food in the country, which had surged to as high as N52,000 per bag during the forex ban.

According to a statement titled “CBN Restates Commitment to Boost Liquidity in Forex Market,” signed by the Director of Corporate Communications, Isa AbdulMumin, the Central Bank’s decision to lift the ban aimed to promote liquidity in the forex market. It allowed importers of the previously restricted 43 items to purchase foreign exchange within the Nigerian forex market.

While some maritime practitioners have praised this decision, others remain concerned that it may not significantly impact the sector due to ongoing issues with exchange rates.

Lucky Amiwero, Founder of the National Council of Managing Directors of Licensed Customs Agents, believes that the impact of the reversal may be limited. He noted that while the forex ban was in place, the unstable exchange rate could discourage imports. He emphasized the need for a stable exchange rate to drive meaningful change.

Sikiru Remilekun, a member of the Association of Nigerian Licensed Customs Agents, expressed doubts that the lifting of the ban would lead to significant changes in rice imports. He predicted that local manufacturers may oppose importers of these commodities.

Nasiru Salami, President of the trans-border traders association, pointed to insecurity and other factors that have affected local production. He explained that agricultural products’ prices have surged due to farmland destruction and the migration of farmers to urban areas, which has resulted in increased production costs.

Eugene Nweke, former National President of the National Association of Government Approved Freight Forwarders, is optimistic about the reversal’s potential to improve forex flexibility and liquidity. He believes that investors will explore opportunities to increase imports, which can boost commercial activities, forex performance, ship calls at ports, and job creation.

To fully realize the benefits of the CBN’s policy reversal, urgent measures are needed to address forex challenges and exchange rate fluctuations. Dr. Boniface Aniebonam, a seasoned freight forwarder and founder of NAGAFF, suggested granting amnesty to importers whose goods were seized by the Nigeria Customs Service due to the previous CBN policies. This approach could enhance revenue collection and rectify actions taken under the former administration.

As divergent opinions continue to surface, the success of the CBN’s forex ban reversal may depend on broader economic policies and measures to ensure a stable exchange rate.

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