In an attempt to maintain the security of this foreign currency (FX) Market and ensure efficient usage of foreign currency for derivation of optimum advantages of products or services imported into Nigeria, the Central Bank of Nigeria (CBN) recently granted an innovative new directive in a circular it distributed.
The directive exempts some imported products or services from set of products permitted access FX in the Nigerian foreign currency areas to foster and support regional creation of these products in the nation.
The implication of the development is importers desiring to import some of the products placed in these CBN’s directive will be necessary to supply for FX resources without any recourse to the Nigerian forex market (Interbank marketplace and BBN Intervention).
The list of the affected products are outlined below but can be evaluated whilst the need occurs. However, take note your importation of those products aren’t banned.
The things include the following:
Palm kernel/Palm oil products/vegetables oils
Meat and refined animal meat products
Vegetables and processed vegetable products
Poultry chicken, eggs, turkey
Tinned seafood in sauce(Geisha)/sardines
Cold rolled-steel sheets
Galvanized metallic sheets
Metal cardboard boxes and containers
Wire rods(deformed and never deformed)
Iron rods and strengthening bard
Security and razor wine
Wood particle boards and panels
Wood Fibre Boards and Panels
Plywood boards and panels
Glass and Glassware
Tiles-vitrified and ceramic
Plastic and plastic products, polypropylene granules, cellophane wrappers
Soap and makeup
Eurobond/foreign money bond/ share expenditures
Inside our view, we comprehend Share acquisitions (item 40 inside listing) is referring to Nigerians who access market to buy foreign securities and never foreign investors who inflow resources into Nigeria for reasons of investment.
The CBN reported this was in a bid to maintain the security of this forex and ensure the efficient usage of currency exchange whilst encouraging regional creation of these products. The CBN in addition reported obviously that importation of those products aren’t banned, however importers of those products shall achieve this employing their own resources without recourse to the Nigerian foreign currency Markets.
The implication of the is you will have decreased demand on the authoritative marketplace which means decreased pressure on the formal FX marketplace. However, you will have increased pressure on the parallel Market (Bureau de Change). The space amongst the parallel and formal marketplace will broaden and rate for dollars inside parallel marketplace increase. This can in addition induce a rise in the cost of these products in your area for customers and ultimately rising prices.