According to the Chamber, the apex bank needs to urgently articulate a comprehensive framework for the autonomous market, which is now the major forex market.
The chamber noted that normalisation of the foreign exchange market is very crucial at this time to stem the current slide in the economy, factory closures, job losses, escalating prices, waning GDP growth and weakening investors’ confidence, adding that the impact is being felt across all levels of investments – large companies, medium enterprises, small business, micro enterprises and the informal sector
LCCI in a statement made available to The Guardian and signed by its Director-General, Muda Yusuf, explained that the systemic significance of foreign exchange policy in the Nigerian economy needs to be well appreciated, as a result of the high import dependence of the economy, and also a reflection of the increasing integration of the Nigerian economy into the global economy.
Yusuf stated that the market needs to be clearly defined, adding that foreign exchange from diaspora remittances, export proceeds, forex sales by foreign investors and multinational companies as well as donor agencies should be allowed to be freely traded in the autonomous market.
“We acknowledge steps taken by the CBN to manage the current conditions. The policy actions were inevitable in the circumstances. But the foreign exchange market is still characterized by considerable uncertainty which drives speculative activities and impacts negatively on investors’ confidence.
“As the Monetary Policy Committee [MPC] of the CBN meets this week, current controls and regulations of forex inflows into the economy should be relaxed, without necessarily compromising the money laundering prevention measures of the relevant authorities. Overregulation considerably hurts the economy. It is paramount at this time articulate policies that would stimulate and unlock the huge potential in diaspora remittances and other capital inflows into the economy.
“Meanwhile, we reiterate our call to the CBN to lift foreign exchange restrictions on the 41 items, especially now that the CBN official forex window has been closed. The restrictions have caused considerable loss of jobs and many more jobs are at risk as many firms run out of stock of their critical inputs for production. For the sake of economic policy coherence, any product that is not on the official import prohibition list of the federal government should have access to the autonomous foreign exchange market”, the LCCI added.
“While import prohibition is a vital trade policy matter which should be undertaken in an integrated manner with inputs from the Finance Ministry, National Planning, Trade and Investment and the Nigeria customs service, the LCCI note that the dimensions of inter-sectoral linkages, employment implications, customs revenue implications, breaches of regional and other international trade treaties should be taken into account”.
