By Louis Achi
Following the Central Bank of Nigeria (CBN) decision to lift the restriction on forex supply on 43 imported items, the House of Representatives has dramatically summoned the CBN Governor Yemi Cardoso to explain the economic rationale.
The Lower House passed the resolution to summon the CBN Governor during plenary on Tuesday.
This followed the adoption of a motion of urgent public importance sponsored by Sada Soli, a lawmaker representing Kaita/Jibia Federal Constituency of Katsina State.
Some of the items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, poultry and processed poultry products, tinned fish in sauce (Geisha)/sardine, cold rolled steel sheets, galvanized steel sheets among others.
Moving the motion, Soli recalled that the CBN imposed the restrictions in June 2015 to conserve the foreign exchange reserves and promote local production of certain goods, including about 11 food items.
He recalled that on Oct. 12, the apex bank announced, among other issues, the lift on FOREX restrictions hitherto placed on 43 items.
According to him, some of the items have tariffs to protect local industries, as they are part of the imports prohibition list.
Soli expressed concern that the decision of the bank will greatly affect local production of items such as rice, cement, and palm oil among others.
The lawmaker said that it will force local manufacturers to hold the short end of the stick, leading to factory closure and ultimately eroding capacity to build the country’s local economy.
“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 to 70 per cent 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;
“Also worried that 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 our economic growth and not suitable to the current unified FOREX market in the country.
“Further worried that Nigeria will not be competitive in the African Continental Free Trade Area if our markets are flooded with imported finished goods.
“The decision followed the rising food inflation in the country which has significantly impacted the economy and the purchasing power of consumers in the country,” he said.
Soli said that lifting of the FOREX restriction on the importation of 43 items may not have meaningful impact on the rising food inflation as a result of soaring exchange rate.
In his ruling, the Speaker of the House, Rep. Tajudeen Abbas pursuant to Section 8 (4) (a) (b) and Section 5 (b) of the CBN Act, 2007 said that the CBN governor should be invited.
He mandated the Committees on Customs and Finance to interface with the governor to explain reasons for the decision.
