The Central Bank of Nigeria (CBN) Wednesday said that importers of rice, cement and other products will no longer access Foreign Exchange from CBN, banks and bureaux de change for such importation.
Mr Godwin Emefiele, CBN Governor, who disclosed this at a news conference in Abuja, said the measure would prevent further depletion of the country’s foreign reserves.
He said the country was spending huge amounts to import things that could be produced locally, adding that the apex bank would not continue to support the importation of such items through the use of the hard-earned foreign exchange.
Some of the products include margarine, palm kernel, palm oil products, meat and processed meat products, vegetables, private airplanes and jets, Indian incense, tinned fish, galvanised steel sheet, roofing sheet and furniture.
He said: “Importers who may want to continue importing these goods would have to source their foreign exchange from their own private sources. “The CBN will continue to be vigilant around this policy, keep reviewing the list of items as it becomes comfortable that these items can be produced locally if we apply ourselves sufficiently.”
Emefiele said CBN was forced to come up with the new policy to exclude importers of rice and 40 other items from the foreign exchange market in order to save the nation’s economy.
He said the time has come for Nigerians to decide what must be done to realise the much-desired economic development, rather than making the nation a dumping ground for other economies of the world.
Warns banks, bureaux de change
According to Emefiele, importers of the listed items would not be allowed access to foreign exchange even from the bureau de change and that any bank or bureaux de change that tried infractions would be severely punished.
His words: “We will not make foreign exchange available to such importers from any market. If you read that circular, it said ‘from Nigerian foreign exchange markets’, plural, not singular. Foreign exchange will not be provided by the Central Bank of Nigeria, the banks or by bureaux de change. If we find people flouting it, luckily these people we have mentioned are under our regulation, we know how to deal with them.
“Sometimes, policy changes are forced on policymakers as a result of exogenous shocks beyond their control. While most people do not like to be forced to do something, one of the hallmarks of effective policymaking is to be nimble and responsive when such situations arise.
“In the case of (Tuesday’s) announcement, I am happy to inform and underscore that this policy change is in line with my long-held belief that Nigeria cannot attain its true potentials by simply importing everything. At some point, we have to all decide what we really want for our country, and I believe that the time is now right for that deep and honest conversation.”
He added that CBN’s analyses of the nation’s economic situation “compelled us to believe that we needed to aggressively begin the process of feeding ourselves by ourselves and producing much of what we need in this country.”
Emefiele noted that the nation was wasting huge amounts of money importing things that could be produced locally, a situation, he said, had become a drain on the nation’s Foreign Exchange Reserves.
It’s shameful that we have to import toothpick
According to him, “most of you are aware of the often-quoted number of N1.3 trillion, which is what we spend on average importing rice, fish, sugar, and wheat every year.
“I am saying it is shameful that we have to import toothpick. I am saying that it is shameful for us to import fish in sauce canned, fish in sauce and sardine. I am saying it is shameful. Before I was born, palm kernel was taken out of Nigeria and taken to another country and today, we go to that country and import palm oil. It is shameful.
“It is shameful that items that we used to produce in this country we now begin to import them. It is shameful and we need to stop them. That is what we are saying.
“Only last week, I met the Governor of Kebbi State and he lamented the unfortunate situation in that state. Where people, our own farmers, have committed themselves to producing rice and have produced paddy and we have paddy glut in Kebbi State today.
“As I speak, the government has spent its money buying paddy from the rice farmers, almost close to 200,000 tonnes of paddy rice.
“Aside from that, Kebbi State, farmers have unpurchased paddy rice close to 800,000 tons. And yet we patronise imported rice. For our benefits, those rice imported into the country are those that have spent at least seven years in their stores and yet we have rice that is produced today in Nigeria and we are running away from them.
“The only way we can encourage people who are producing rice to go back to the farms is to do what we have done today.
“How can we keep complaining about the depreciation of the naira when all we do as a people is to import everything from ordinary Geisha and toothpicks to even eggs? These are some of the fundamental reasons behind the bank’s recent announcement.”
He disclosed that there was already a glut in paddy rice in parts of the country, especially Kebbi State where the government had spent huge sums of money to buy off 200,000 tons from the farmers, yet they had another 800,000 tons unpurchased.