CBN stops forex for fertiliser importation

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CBN

The Central Bank of Nigeria says no more forex facility for importation of fertiliser and threatens severer sanctions for sabotage

By Emeka Ejere

The Central Bank of Nigeria has included fertiliser on the list of 41 import items classified as ‘not valid for foreign exchange’ in the Nigerian forex market, with effect from December 7, 2018.

Disclosing this on Monday, December 10 in a circular titled, ‘Inclusion of some imported goods and services on the list of items not valid for forex in the Nigerian forex market,’ the CBN noted that the move is in continuation of effort to sustain the achievement recorded from the restriction.

Godwin Emefiele, the CBN governor, had in his keynote speech at the 53rd Annual Bankers’ Dinner of the Chartered Institute of Bankers, CIBN, held in Lagos penultimate Friday disclosed that the various initiatives aimed at encouraging domestic production, had resulted in Nigeria’s monthly import bill falling significantly from $665.4 million in January 2015, to $160.4 million as at October 2018.

Noting that this represents a drop by 75.9 percent and an implied savings of over US$21 billion on food imports alone over that period, Emefiele observed that many entrepreneurs are now taking advantage of policies aimed at ramping local production to venture into the domestic production of the restricted items with remarkable successes and great positive impact on employment.

The circular, however, added that it will ensure that transaction (Form M) on fertiliser “for which payments are outstanding are settled at the appropriate settlement dates.”

In another circular on ‘Foreign exchange restriction on the importation of 42 items’, the CBN recalled that as part of its development of employment generation and inclusive growth in Nigeria, it in July 2015 restricted the availability of forex to the importation of 41 items, which could be competitively produced within the economy.

“The policy has resulted in massive investments and the establishment of cottage industries that now engage in the production of the restricted items across the country. The growth and employment benefits have been phenomenal,” it said.

The apex bank regretted that trade information available to it indicated the circumvention of the policy as the restricted items are being dumped in the country.

According to the circular, the implications are that the growth and employment benefits arising from the policy may be eroded if not checked.

The circular reads in part: “The CBN views this development with trepidation. The Economic Intelligence Unit of the bank in collaboration with the Economic and Financial Crimes Commission would commence immediate investigation of the accounts of the corporate and entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits.

“Such sanctions would, among others, include blacklisting the corporate and their directors; closure of their bank accounts; and restricting them from maintaining any bank account in any bank under the CBN remit. Banks that provided their platforms for such economic abuses would also be appropriately sanctioned.”

– Dec. 11, 2018 @ 16:05 GMT |

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