In response to the pressure faced by the naira, which tumbled to 1,050/$ at the parallel market, the Central Bank of Nigeria (CBN) has announced an increase in dollar supply in the foreign exchange market. The CBN has also lifted the ban on 43 items that were previously not eligible for forex at the official market.
The decision to raise the dollar supply and remove restrictions on certain items came after calls from international organizations and experts and the naira’s decline in value. The CBN, despite unifying exchange rates, had maintained the ban on 43 non-eligible items introduced under the former governor, Godwin Emefiele.
Items such as crude palm oil, vegetable products, animal products, meat, vegetable fats and oils, steel products, rubber, plastic, clothes, and textiles were among the restricted items. However, Nigerians continued to import these items, with data from the first quarter of 2023 showing imports worth N543 billion.
Several economic experts and organizations had advised the CBN to remove forex restrictions, with Citigroup and the World Bank urging the CBN to end its forex restriction policy. The CBN has now succumbed to the pressure and lifted the ban on the importers of the 43 items restricted from accessing foreign exchange on its official platform.
In a statement titled “CBN Restates Commitment to Boost Liquidity in Forex Market,” the CBN emphasized its commitment to promoting orderliness and professional conduct in the Nigerian foreign exchange market. It mentioned that forex rates should be referenced on recognized platforms for transparency and credibility.
The CBN assured that it would boost liquidity in the forex market through interventions, gradually decreasing these interventions as market liquidity improved. The statement also mentioned ongoing efforts to clear the forex backlog and dialogue with stakeholders to address the issue.
Meanwhile, the new Governor of the CBN, Olayemi Cardoso, stated that the new leadership team is reviewing the CBN’s foreign exchange market policies, corporate governance practices, and monetary policies. The assessment aims to reform the central bank as a catalyst for economic growth and development. Cardoso outlined the challenges facing the CBN and proposed high-level solutions for reformation.