HOUSE OF REPRESENTATIVES FAULTS THE LIFTING OF FOREX RESTRICTIONS ON 43 ITEMS 24-10-23
By Sadiq Aminu The House of Representatives has resolved to invite the Governor of the Central Bank of Nigeria to brief the house on on the recent decision to lift FOREX restrictions on 43 items.
The house also urged the CBN to engage with other stakeholders within the fiscal ecosystem on the matter.
This was sequel to the adoption of a matter of urgent public importance by a member from Katsina State Mr Sada Soli, at plenary.
The Lawmaker observed that when the Apex Bank imposed the restrictions in June 2015 to conserve the foreign exchange reserves and promote local production of certain goods, the decision was to protect local industries.
Mr Soli expressed concern that the decision would greatly affect local production of items such as rice, cement, and palm oil among others, as it will force local manufacturers to hold the short end of the stick, invariably leading to factory closure and ultimately eroding the capacity to build the country’s local economy.
“Aware that almost all the 43 items are from two critical sectors which have been identified by all policy documents from NEEDS, SEEDS to Vision 2022 as being areas that are critical to economic diversification.
“Worried that some of the listed items enjoy 60%-70% subsidy from their countries of origin, thus putting Nigeria’s local products at a comparative disadvantage and without any protection, and will lead to job losses and social exclusion.
According to him, the benefit of the cheaper imported inputs as stated by the CBN will give undue advantage to middlemen to drive the economy, which is inimical to the country’s economic growth and not suitable to the current unified FOREX market in the country;
He stated that Nigeria will not be competitive in the African Continental Free Trade Area if the markets are flooded with imported finished goods, saying the decision may not have meaningful impact on the rising food inflation as a result of soaring exchange rate.
Adopting the motion, the House also urged the CBN to develop a system that will engender professional conduct by all key players in the Nigerian Foreign Exchange Market to guarantee market forces determine exchange rates on a Willing Buyer-Willing Seller Principle.