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Ban on 41 items has driven considerable decline in import bills—CBN

The Central Bank of Nigeria (CBN), has opened up on the gains of the policy restricting 41 items from the FX markets, saying the economy has achieved considerable drop in import bills which has been the driver of unbearable forex crisis.

Giving insights on the economy in an interactive session with select journalists in Lagos, the Governor of the apex bank, Dr. Godwin Emefiele, averred that “We have also seen significant appreciation of the naira from over N500/US$1 to about N360/US$1. In addition, we have seen stability in the rate for over six months now. I am glad to note that the exchange rate is not only stable; it is also converging across various windows and segments of the market”.

“Our reserves have recovered significantly from a low of just over $23bn in October 2016 to over $34.3bn as of November 3, 2017. The accretion in reserves does not only reflect increased inflow but also our shrewd FX demand management strategy.

According to him, “When we introduced a policy restricting 41 items from our FX markets, we were called all manners of names. Today ladies and gentlemen, among the benefits of that policy is the considerable decline in our import bills”.

“From an average of about $5.5bn, our monthly import bill has fallen consistently to $2.1bn in 2016 and $1.9bn by half year 2017. This is indeed commendable. The World Bank’s ease of doing business indicator for 2018 showed that Nigeria with a score of 52.03, improved 24 places to rank 145 out of 190, standing above the regional average score of 50.43 recorded for sub-Saharan Africa.

“I must note that the CBN efforts reinforced the Presidential initiatives to improve ease of doing business in Nigeria. The establishment, nurturing and administration of the Credit Bureau and the National Collateral Registry contributed in no small measure at improvement of access to credit and enhancing the ease of doing business in Nigeria.

Emefiele noted further that “The introduction of the transparent I&E FX Window which boosted investor’s confidence and eased market sentiments also buoyed our doing business indicator. Due to the dogged implementation of our FX restriction on certain items, we have recorded spectacular improvements in domestic production of most of these items. Local manufacturers are reporting major boosts to their revenue and profit due to the policy.

Continuing, he added that “In line with an agreement we reached with Unilever, the company will be commissioning a new Blue Band Factory in Agbara, Ogun State early next month. We have also seen a sharp drop in imports of rice from several countries”.

“To give one example, data from the Thailand’s Rice Exporters Association indicate that in 2012, about 1.2 million Metric Tonnes of rice was exported to Nigeria. However, in 2016, which was the first full year of implementation of our policy, rice exports to Nigeria had fallen by 99 percent to only 784 Metric Tonnes.

“This significant reduction in imports of rice from Thailand represents a saving of over $600 million to Nigeria in 2016 alone. It is heart-warming to note that this fall in imports have been largely filled by a boost in local rice production. For example, employees at Labana Rice Mills in Kebbi State are trying to keep pace with demand, processing 320 tons of rice a day, a 250 per cent increase from the previous year.

“From Kano, UMZA rice has expanded its milling capacity substantially to the extent that with the recent bumper paddy harvest, the company today takes delivery of over 100 trucks of paddy rice daily. These are clearly verifiable successes of government’s attempts to create jobs locally, improve the wealth of our rural population, improve industrial capacities and ultimately attain economic growth in Nigeria.