The Central Bank of Nigeria (CBN) has recently announced the lifting of foreign exchange restrictions on the importation of 43 items that were previously imposed eight years ago.
According to a statement released on Thursday, October 12, Dr Isa AbdulMumin, the director of corporate communications of the bank, highlighted a significant change in the foreign exchange market policy.
Importers who were previously restricted from purchasing foreign exchange for the specified 43 items, as outlined in the 2015 Circular referenced as TED/FEFPC/GEN/O1/010 and its addendums, are now permitted to engage in the Nigerian Foreign Exchange Market and acquire foreign currency for their transactions.
As of October 2021, the Central Bank of Nigeria (CBN) had restricted access to Forex from the FX market for several items, including rice, cement, palm oil products, meat and meat products, and poultry and poultry products, among others.
The updated statement underlined the CBN’s commitment to addressing the existing backlog of foreign exchange transactions and engaging in ongoing discussions with stakeholders to find solutions and facilitate its clearance.
Furthermore, the CBN expressed its long-term objective of establishing a unified foreign exchange market in Nigeria by simplifying and streamlining the FX market. The bank is currently in consultation with various market participants to work towards achieving this goal, which would result in a more cohesive and efficient foreign exchange market in the country.
To ensure market forces determine exchange rates, the CBN emphasized the importance of promoting orderliness and professional conduct among all participants in the Nigerian Foreign Exchange Market. It also recommended referencing prevailing FX rates from platforms such as the CBN website, FMDQ, and other recognized or appointed trading systems to enhance price discovery, transparency, and credibility.
The CBN also plans to boost liquidity in the Nigerian Foreign Exchange Market through periodic interventions while gradually reducing these interventions as market liquidity improves.
Importers of the previously restricted 43 items are now authorized to purchase foreign exchange in the Nigerian Foreign Exchange Market.
The CBN remains committed to expediting efforts to clear the FX backlog with existing participants and continuing dialogue with stakeholders to address the issue.
Lastly, the CBN has set the attainment of a single FX market as one of its goals and is currently engaged in consultations with market participants to accomplish this objective. Participants and the general public are advised to adhere to the aforementioned guidelines.