OPS commends CBN on new forex regime

• Seeks review of stance on 41 restricted items

Members of the Organised Private sector (OPS) have commended the Central Bank of Nigeria (CBN) for the new foreign exchange regime it unfolded yesterday, noting that the move will improve liquidity in the foreign exchange market and stabilise the economy.

Besides, the members of the OPS expressed concerns about the continued restriction of the 41 items from access to forex by the CBN under the new forex regime, explaining that while some commodities that could be produced via farming have experienced improved investment in their value-chain, a lot of industrial firms still depend on some of the restricted items which form part of raw materials for production of some goods.

Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf said that the single market structure through the inter-bank , autonomous window will aid transparency in the foreign exchange market, adding that the decision has a multiplier effect on encouraging inflows from the Diaspora market, capital importation and export proceeds.

On the sustained restriction of 41 items under the new forex regime, Yusuf said: “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 dimensions of inter-sectoral linkages, employment implications, customs revenue implications, breaches of regional and other international trade treaties should be taken into account.”

Corroborating this view, President of the Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs noted that while the CBN might have maintained its stance on the 41 items, some of the HS classified products need to be addressed urgently as there are outstanding requests to meet local production needs.

Reacting to the CBN new policy, Head, Energy Research, Ecobank Development Company (EDC) Nigeria Limited, Dolapo Oni described the flexible exchange rate as a welcome development.

Oni stated: “It’s a good move by the CBN as it will make dollars more available to everyone, especially the petroleum marketers/importers. The real concern is where the price will settle because this will determine if fuel prices will need to also go up on not. Based on our estimates, the current fuel price can accommodate dollar prices up to N285.”

The President, Independent Shareholders Association of Nigeria, Sir Sunny Nwosu explained that the new regime would impact positively on the Nigerian capital market if foreign exchange is made available in the system.

He, however, explained that appointing intermediaries for the foreign exchange market would increase cost, adding that the dealers would want to recover the expenses incurred for the services.
An investor, who is also an audit committee member of quoted companies, Adebayo Adeleke explained that the more government create market dealers as intermediaries in a value chain, the more bureaucratic, expensive and corrupt the system becomes.