THE Lagos Chamber of Commerce and Industry (LCCI) has kicked against the Central Bank of Nigeria’s (CBN’s) recent policy on foreign exchange (forex), which listed 41 items not valid for foreign exchange, arguing that it has dire consequences for the economy if not reviewed and possibly reversed.
Its President, Mr. Remi Bello, at a forum with the CBN in Lagos, frowned at the inclusion of what he called ‘intermediate products’ on the list of the 41 items excluded from the forex market.
While flaying CBN for not engaging the private sector before introducing the policy, Bello noted that as key stakeholders, the opinion of private sector operators should have been sought.
An economist, Mr. Opeyemi Agbeje, said there had been anxiety in the business community over the exclusion of the items from the market, adding that it is a de-facto ban. “Many businesses are affected. The policy process should have involved consultation and engagement of the organised private sector,” he said.
Managing Director Coleman Industries, makers of Coleman cables and wires, Mr. George Onafowokan, said he lost over N800 million due to the policy and the technical devaluation of the naira by the CBN. “I lost N800 million as a result of the policy,” he lamented, noting that his company has a two-year expansion plan of N11 billion.
He asked: “If we cannot buy our raw materials that we believe have been wrongly tagged in the CBN list, the question is, how will CBN cushion the effect of this devastating policy?”
He insisted that the policy was not in the best interest of the manufacturing sector. He said it would be impossible for his company to keep over 400 workers if the policy was sustained.
But, CBN Director, Monetary Policy, Mr. Moses Tule, explained that the two key micro agencies of the government in charge of fiscal policies must come together, noting that no economy is run on foreign exchange.
He said CBN was not bound to disclose the reason behind its policy before unveiling them, insisting that the apex bank forex policy is in the best interest of the private sector and the nation in general.
“No Central Bank brings its micro economic policy for debate before implementation. We acted in the best interest of the nation with no vested interest anywhere as being alleged in some quarters,” he said.
Tule wondered why people do not question unpatriotic traders who import unwanted things, thereby depleting the nation’s foreign exchange reserves.
He said: “From January to May, we spent $575 million importing wheat. We have land and farmers in abundance. We should not forget that agriculture contributes about 85 per cent of our GDP. In the same period, we imported fish worth $374million. Are we saying we cannot produce fish locally? What are we doing with all the fish farms in the country?
“In addition, the nation spent $349 million in the same period importing electrical and electronics; this can only happen here. In other countries they will insist that you set up manufacturing plants in their country, but here we are quick to import. Must we continue to grow other nation’s economies, keeping their factories running to the detriment of ours?”
He insisted that CBN does not have enough foreign exchange to encourage people to spend on frivolities, such as tooth picks or even private jets, adding that those who insist on doing things the old way should at least source their foreign exchange themselves.
Tule insisted that CBN had not banned the import of any of the items on the lists, saying it does not have the power to do so. He stressed that CBN does not have the cash to allocate for the importation of tooth picks and items that will not boost the economy.
He revealed how the government policy, shortly before the elections, impaired the growth of local rice, as the government issued licences to some people to import rice, adding that this crippled its huge benefits the country has made in the local production of rice in Kebbi and other states.
Tule regretted that some farmers were in a fix and remain impoverished as they could not sell what they produced with the challenges of insurgence in the northeast.
The CBN boss insisted that the policies were as a result of the prevailing economic situation in the country.
“CBN has at various times toyed with several policies such as wholesale, retail, interbank, Dutch auction system etc. Now we are restricting certain products from accessing foreign exchange.
“We are committed to the growth of our economy, job creation and the overall well being of our nation. We have put intervention funds at a point in time, tried to domesticate what we need here and in that light have supported the manufacturing sector to grow,” he said.
