The Nation Newspaper

Tag: forex policy

  • CBN’s forex policy raises production capacity for manufacturers

    CBN’s forex policy raises production capacity for manufacturers

    Local manufacturers have praised the Central Bank of Nigeria’s (CBN’s) forex policy, saying it has raised their production capacity and enhanced their operations.

    Two leading local manufacturers in the packaging industry acknowledged that the impact of CBN policy on forex since its inception has more than doubled their productive capacities, helping them to meet increased demand of their products.

    Deputy Managing Director of Tempo Paper Pulp & Packaging Ltd, Nassos Sidirofagis disclosed that since policy implementation started, his firm has been able to increase its production capacity from 50 per cent to 70 per cent.

    This, he said, has raised their export volume and foreign exchange earnings for their firms and economy.

    Speaking further, he said the policy has helped the manufacturers to realise the urgent need to expand because of increasing demands for their products.

    Sidirofagis said the company planned to start an expansion project due to expected increase in demand within this year and next.  “We have since developed capacity to also attract foreign investors, who we believe are exploring investment opportunities in our organisation. Therefore, on all sides this is a win-win situation for Nigeria and local manufacturers,” he said.

    On mitigating challenges facing local manufacturer’s capability to expand, he noted that government should focus more on manufacturers so that the local economy will not experience what Greece experience.

    For him, the CBN should continue to implement the policy for the next two or more years, to facilitate full development of local capacity to attract investors.

    Also speaking, Group Operation Manager of SREN Chemicals Limited, Oluwasesan Taiwo-Tijani, said his firm has benefitted from the CBN foreign exchange policy.

    He explained that the policy has forced several companies who are import-driven to patronise SREN Chemicals and hence, raised their transaction volume and profitability.

    “This impacted on our sales with our productive capacity increased by 30 per cent,” he said.

    Taiwo-Tijani urged the Federal Government to retain the policy so as to sustain local content development and to turn Nigeria into an export dependent country.

    He urged the CBN and Federal Government to mitigate challenges facing local manufacturer’s capability to expand so as to enhance the economic development f the country.

  • Labour union calls for forex policy review on tomato paste

    Labour union officials in some of the local tomato processing companies have called on the presidency to prevail on CBN to review the forex policy listing of triple concentrate tomato paste among the 41 items banned from accessing foreign exchange from the official window by the Central Bank of Nigeria. The officials claim that the inability of the firms to import tomato concentrate, which is the main raw materials used in their production process, had drastically affected them.

    According to the president, National Union of Food, Beverage and Tobacco Employees,  Lateef Oyelekan, the companies involved should be given the latitude to plan for backward integration as one of the downside of the policy is that it could lead to massive job losses, as an estimated 1000 jobs are likely to be lost in the tomato process manufacturing sector.

    “The jobs of the workers are at stake unless the ban is reversed, and that the opportunity for backward integration would be lost by the affected companies.”

    According to him, the quantity of the produce being cultivated currently in the country is not enough for local consumption and the quality is not good enough to be processed into paste.

    He pointed out that it would take years for the planting, harvesting and processing of the produce into concentrate, adding that most of the companies had run out of stock.

    Oyelekan explained that the volatility factor inherent in tomato farming is often a product of seasonal variations, which is itself a function of the variables of weather, agronomy, water, seed, fertilizer, market, storage, transportation, and numerous other agro-allied business dynamics.

    “If triple concentrate tomato paste is now placed among the list of items that will not have access to the foreign exchange market overnight, that line of business has been killed because the government is working from the perspective that there are tomatoes in the environment for cultivation, processing into paste and packaging. Rather than prohibiting the items overnight, why not engage the manufacturers in discussion.”

    He expressed that the objective of the forex restriction was not a bad idea on its own, but lamented that the implementation of the policy has far-reaching implication in the short, medium and long term.

    Also speaking on the policy, president of the Lagos Chamber of Commerce and Industry (LCCI), Remi Bello, while decrying the policy, warned that most manufacturers might be forced to shut down and move their operations to neighbouring countries due to their inability to access foreign exchange for raw materials and other critical inputs.

    According to him, the government needs to first address the issue of post-harvest wastage emanating from inadequate storage and the absence of processing facilities and the development of agro-allied industry. “No matter how bounteous the nation’s harvest is, such productivity will count for little if the produce cannot be stored,” he said.

  • Senate urges CBN to relax strict Forex Policy

    Senate urges CBN to relax strict Forex Policy

    The Senate has urged the Central Bank of Nigeria (CBN) to immediately relax its strict Foreign Exchange policy.

    The upper chamber said that the strict foreign exchange policy is doing more harm to the country’s economy than good.

    Senate President Bukola Saraki who stated this during a meeting with the Managing Director of the International Monetary Fund, IMF, Christine Lagarde said small businesses especially, are being made to suffer unnecessarily.

    Saraki asked the apex bank to introduce a more flexible foreign exchange regime and reduce the present restrictions on the autonomous market which does not allow business men to bring in foreign exchange or utilise what they have in their accounts.

    The Senate President had equally canvass a similar view at a private meeting with CBN Governor, Mr. Godwin Emefiele during which he implored him to consider the effects of the present forex regime on small businesses which are dying  following evaporating crude oil revenue.

    Saraki also told Lagarde that “The IMF should support our CBN to bring in low interest loans to SMEs. We need to encourage entrepreneurs and make most of our new graduates job creators rather than job seekers. This is an area where we need the financial support and technical assistance of the IMF.”

    He explained that his office has received numerous complaints from small business owners, complaining that their businesses are being threatened by the huge bottlenecks now involved in doing business.

    “As legislators, we play an important role in making our people understand IMF’s advice, policy trade-offs, consultations and other engagements, so that ownership, transparency and accountability are brought to bear on economic policy choices.

    “The Nigerian legislature strongly believes that having a collaborative working relationship with the Executive Branch of government brings development closer to the people.

    “Since the advent of the new administration, we have worked closely to stabilize the economy and steady the fiscal environment. This, we have indeed demonstrated by the speedy passage of the Medium Term Expenditure Frame Work (MTEF) and recently in the postponement of our recess in order to receive President Muhammadu Buhari to present the 2016 Appropriation Bill.

    “The purpose of our Legislative Agenda is to enable us focus our lawmaking in areas that will help create jobs, expand our infrastructure base and make our economy work for the benefit and happiness of the majority of our people.

    “Pivotal to the attainment of this overarching objective is the state of the Nigerian business environment. In collaboration with major stakeholders, the 8th Senate is presently signing a memorandum of understanding on Enhancing Nigerian Advocacy for Better Business Environment Project, a National Assembly business and investment roundtable initiative, with developmental organizations”, the Senate President said.

    The Senate President used the occasion to call on the Central Bank of Nigeria (CBN) to ensure that in reacting to recent developments in the economy, it does not devalue the Naira for the mere sake of devaluation.

  • Cement producers to CBN: Forex policy hurting economy

    Cement producers to CBN: Forex policy hurting economy

    Cement Producers Association of Nigeria (CPAN) has urged the Central Bank of Nigeria (CBN) to reconsider its foreign exchange (forex) policy that compels exporters to sell their forex earnings at the CBN’s official exchange rate of N197 to the dollar instead of allowing them to sell at the open market.

    Speaking with The Nation, its President, Prince David Iweta, said the policy is retrogressive and a disincentive to investment.

    Iweta, who is also President, Sapele Chambers of Commerce Industry Mines and Agriculture, said: “We are compelled to draw the attention of Mr. President to the economic danger that lay ahead of our dear country

    “While we hail the decision of the CBN policy that makes it mandatory to repatriate all exports proceeds back to the country within 180 days, the decision of compulsorily forcing exporters selling the proceeds at official exchange rate is one singular reason that the naira is exchanging at N280.00 to $1.00 as at today.

    “This action of the CBN of not allowing non-oil exporter to use their earned forex 100 per cent to settle their own import bills  or selling to the highest bidder of such privately earned proceeds at this critical period of acute shortage of forex has negatively affected exports of Nigerian commodities. We view this action as unprogressive, provocative, and destructive to businesses of export as it does not support export growth just as it does not make economic sense when our foreign reserve position can only supports three to four months imports.”

  • Ban of tomato paste: Labour calls for forex policy review

    Ban of tomato paste: Labour calls for forex policy review

    The officials of Labour union in some of the local tomato processing companies have called on the presidency to prevail on Central Bank of Nigeria (CBN) to review the forex policy listing of triple concentrate tomato paste among the 41 items banned from accessing foreign exchange from the official window by the CBN as the inability of the firms to import tomato concentrate which is the main raw materials used in their production process had drastically affected them.

    This is according to the President, National Union of Food, Beverage and Tobacco Employees, Lateef Oyelekan, saying the companies involved should be given the latitude to plan for backward integration as one of the downside of the policy is that it could lead to massive job losses, as an estimated 1000 jobs are likely to be lost in the tomato process manufacturing sector.

    “The jobs of the workers are at stake unless the ban is reversed, and that the opportunity for backward integration would be lost by the affected companies.”

    According to Oyelekan, the quantity of the produce being cultivated presently in the country is not enough for local consumption and the quality is not good enough to be processed into paste.

    He pointed out that it would take years for the planting, harvesting and processing of the produce into concentrate, adding that most of the companies had run out of stock.

    Oyelekan explained that the volatility factor inherent in tomato farming is often a product of seasonal variations, which is itself a function of the variables of weather, agronomy, water, seed, fertilizer, market, storage, transportation, and numerous other agro-allied business dynamics.

    “If triple concentrate tomato paste is now placed among the list of items that will not have access to the foreign exchange market overnight, that line of business has been killed because the government is working from the perspective that there are tomatoes in the environment for cultivation, processing into paste and packaging. Rather than prohibiting the items overnight, why not engage the manufacturers in discussion.”

    He expressed that the objective of the forex restriction was not a bad idea on its own, however lamented that the implementation of the policy has far-reaching implication in the short, medium and long term.

    Also speaking on the policy, President of the Lagos Chamber of Commerce and Industry (LCCI), Remi Bello, while decrying the policy, warned that most manufacturers might be forced to shut down and move their operations to neighbouring countries due to their inability to access foreign exchange for raw materials and other critical inputs.

    According to him, the government needs to first address the issue of post-harvest wastage emanating from inadequate storage and the absence of processing facilities and the development of agro-allied industry.

    “No matter how bounteous the nation’s harvest is, such productivity will count for little if the produce cannot be stored,” he said.

  • Forex policy distorting business plans, says Viva chief

    Forex policy distorting business plans, says Viva chief

    MD/CEO Vava Furniture, Michael Tawadrous, has said the Central Bank of Nigeria (CBN’s) foreign exchange (forex) policy has taken its toll on businesses in the country, lamenting that it has completely distorted long term business plans of investors.

    According to him, added to the forex problem is the high interest rate, multiple taxation and corruption which have choked investors beyond endurance limit.

    He said: “Economic policies all over the world are dynamic; they change from time to time and affect business both positively and negatively. Indeed, economic policies have been having adverse effect on all businesses here in Nigeria. For instance, as importers of raw materials, the scarcity and high rate of forex has been pushing businesses to the limit, to the extent that long term forecasting cannot be set because of the ridiculous fluctuation in the market.  Again the cost of finance is also thing of concern to local manufacturers. It is quite expensive getting a loan from financial institutions.  We also have the issue of multiple levies from government agencies, and the most unprofessional approach by the aggressive and corrupt officials.”

    Tawadrous who spoke in Lagos at the weekend, urged the Federal Government to take a second look at some of these policies so that businesses can thrive and jobs created to take care of youth unemployment in the country.

    A UN Millennium Goals Development (MDG) ambassador and consular at the International Court of Arbitration, he said there is need to train indigenous manpower for efficient service delivery.

    Speaking about the firm he said what made VAVA unique in comparison to other furniture retailers is its variety of products that cut across all human needs in terms of furniture, adding that the firm attends to homes, offices, hotels and schools, adding that quality is also another unique selling point the firm has brought to the table that distinguished from the crowd.

    He said: “What makes us unique, from the customers’ point of view is that we consciously eliminate the notion that “quality is expensive”. We are the most affordable brand for the quality level we offer; anything cheaper would be inferior furniture, something you must replace in a matter of months and from the community perspective, we are different from our counterparts because, human capital development is very important to us. We have a robust training and development programme that is very consistent and in line with modern business practice.   We make a deliberate effort to maintain 93 per cent indigenous work force, which is at least up to 33 per cent greater than any other furniture company in Nigeria.

    “It has always been our target, and my dream, to have all our products fully manufactured in Nigeria with every inch of international standard. We pursue this dream with rigour every day. In just three years, today we have over 60 per cent of products locally produced in Nigeria; we have put in place ultramodern equipment and machinery to help us achieve this objective. We equally import carefully selected raw materials that turn our products into the finest furniture you can find in any retail showroom here in the country. Considerable effort is being made to increase existing capacity. We still have a lot of work to do.”

    He said though the furniture retail business has become an all comers’ affairs, only a few players that really understand the business part of it can survive the rush. According to him, the number of retailers is growing at a faster rate and getting into a stage of saturation in spite of the growth rate, the customers are getting well informed about the choice to make by carefully selecting their preferred merchant.

    “You know, “good” is only appreciated in the existence of “bad”. Another aspect to note is, presently in Nigeria, we do not have the do it yourself (DIY) culture.  In a DIY culture, customers would buy their furniture, we would make effort to pack them up in dismantled (much smaller) sizes. “This would make it easy for the package to fit into the trunk of their cars, and with a manual, the customers would be able to reassemble the furniture at home or office. In any case, presently furniture companies are forced to be experts in logistics operations. This is a different company entirely. For instance, we have a logistics department made up of almost 70 workers, here at VAVA. This department handles heavy trucks, transportation / delivery, installation and others. Ultimately it gives us less time to focus on the core part of the business – such design, manufacturing, quality control, retailing and others,” he said.

    He said over the last three years, the firm has done well in spite of the enormous challenges besetting business operating environment in the country.

     

     

     

     

  • On CBN’s forex policy

    On its website, the Central Bank of Nigeria (CBN) states that its purpose is the delivery of price and financial stability and the promotion of sustainable economic development. Surely realising this in a country as complex as Nigeria will be no easy task, more so at this time. The price of crude oil has fallen by about 60per cent from its peak in June of last year exposing Nigeria to a term of trade shock and causing an exodus of capital from the country which has put pressure on the Naira. The Central Bank devalued the currency in November and in February, closed the official window but the pressure on the Naira has persisted. The Central Bank has issued several circulars aimed at controlling demand at the forex market, an unconventional move it calls demand management. The most notable has been the restriction of forex flow to importers of 41 items, the ban on cash deposits into domiciliary accounts and the imposition of daily spending limits on foreign purchases by card users.

    Demand management has helped stabilise rates at the interbank market. However the CBNs policy has put the businesses of some of those affected in great peril and the consequent effect on the price and availability of affected goods is beginning to manifest in the real economy. The ban on some importers created a larger black market with the black market premium reaching levels unprecedented that the central bank had to double forex sales to bureau de change operators to discourage practices aimed at profiting from the wide spread but this has in turn made cross border currency smuggling a thriving business, with the players benefiting far more from the CBN policy than the industries the CBN claims its policies would assist.

    Investors have lost faith in the ability of the CBN to hold rates preferring to stay out of Nigerian assets for as long as the exchange rate uncertainty persists, a major reason the Nigerian stock market has one of the worst year-to-date performances in the world. In a recent development, JP Morgan announced it will remove Nigeria from its Emerging Market Government Bond Index citing reduced liquidity at the interbank market and reduced transparency from the CBNs policy that have made it difficult for investors to exit the market.

    The demand management policy has been widely criticised, with most of the critics calling for an outright devaluation of the naira and some even asserting that the country will gain from the boost to exports. However it is important to note that Nigeria has unique attributes that makes it different from the typical economy with responses to policy actions that have in certain times diverged from the typical economy. This sometimes calls for situations where the central bank’s effort to manage economic shocks should include the use of unconventional measures. Nigeria’s non-oil export, which would benefit from devaluation, is virtually non- existent. Historical data shows that the Naira’s downtrend over several decades has occurred with a simultaneous contraction in non-oil exports as against an expected increase suggesting the role of other factors hindering the growth of non-oil exports in Nigeria. While these factors persist, devaluation will not yield the expected boost to exports. In addition, Nigeria happens to be a low income country with over two-thirds of its population living below the poverty threshold. The country also doubles as highly import dependent, relying on imports for much of its consumer products. Devaluation in such an economy is sure to cause hardship for a majority of the population, throwing many Nigerians into poverty.

    The CBN is not the first to use unconventional measures to try to maintain economic stability. Indeed manyregulatory banks across the world, after running out of conventional ammunition, resorted to atypical measures to restore economic stability during and after the 2008 financial crises. Thus the CBN in trying to achieve its mandate should be innovative in its approach to steer the economy out of crises especially when it has run out of orthodox options. However it is important for policy makers to know that our world of irrational decision makers is far more complex than the most sophisticated economic models used to guide them in decision making. In this situation, there will always be policy risks that are either hidden from sight or grossly underestimated by these models. This makes it necessary for a policy maker about to enter uncharted territory to ensure that the expected benefits of such a move far outweigh the visible risk if he is to be reasonably confident of emerging successful. However in my opinion, the CBN policy of demand management doesnot meet that criterion.

    An alternative to demand management with much less potential to do damage is for the CBN to create a separate forex market for investors where the Naira will be sold at a discount to the price at the interbank market. The price spread between both markets should be wide enough to eliminate the perceived risk by investors. To give its move some credibility, the CBN would have to admit that the Naira is overvalued but at the same time try to hit home its message that the peculiarity of Nigeria’s economy would make a further devaluation contrary to its mandate of maintaining economic stability.

    The bank might further highlight the object of its move which is to address the exchange rate uncertainty that has deterred investors from Nigerian assets. The use of forward guidance will be instrumental in gaining investors’ confidence, portraying the Central Bank as proactive and strategic in its use of unconventional monetary policy. Forward guidance has been used by major central banks to calm financial markets through periods of unconventional monetary policy, proving to be most useful during transition periods. If implemented, this move will boost foreign investments in Nigeria which will in turn improve the forex receipt of the CBN giving it a leeway to reverse at least the most unhelpful of its demand management measures which have been largely reactive and have exposed Nigerians to both hidden and unhidden risk.

    A well-structured market for investors as a sole policy move will be helpful in the short to medium term. Beyond that, it will be less effective in maintaining economic stability especially if the price of crude oil doesnot improve. Thus it should be seen as a way to buy time for the CBN to implement a well-planned import substitution policy with distinct medium and long term objectives. The CBN should work on a strategy with a medium term objective of boosting both our export volumes and the competitiveness of local substitutes to our major imports.

    For the long term objective, the CBN should collaborate with government in identifying and promoting industries where Nigeria has a strong comparative advantage. Such a strategy should not focus on using trade restrictions but rather on carrying out targeted actions that will significantly improve business conditions for local industries. Decades of restricting international trade in Nigeria, save a few cases, have failed to bring about the desired effect of stimulating local production primarily due to Nigeria’s peculiarity as a safe haven for corrupt practices. The beneficiaries of trade restriction have been smugglers and privileged holders of import waivers with the worsening of living conditions for the rest of the population.

     

    • Uyi, 500-Level Medicine and Surgery, UNIBEN
  • CBN forex policy: Experts seek dialogue

    CBN forex policy: Experts seek dialogue

    CONCERNED that the economy is suffering from regulatory headwinds like the Central Bank of Nigeria (CBN) new forex policy, a cross-section of experts have called for a synergy of cooperation with other agencies of government to cushion the effects of such policies.

    At a public forum in Lagos to debate the CBN forex policy jointly hosted by the Nigerian Economic Summit Group (NESG) and the Policy Development Facility, Phase II (PDF II), a UKaid programme, experts suggested way out of the crisis.

    In his welcome address, Laoye Jaiyeola, Chief Executive, NESG, said there was need for better stakeholder engagement to the fallout of the policy.

    “This problem will continue to hurt us if we keep on delaying or deferring a dialogue on it,” Jaiyeola said.

    Echoing similar sentiments, the CBN governor, Godwin Emefiele said the apex bank was not averse to dialogue as most of its policy initiatives usually benefitted from divergent views.

    The CBN governor who was represented by Mr. Moses Tule, Director Monetary Policy Department, CBN, emphasised that the short and long-term effects of the forex policy was considered before the policy was rolled out.

    According to the CBN boss, the economy of Nigeria desperately needs to be revamped, as such no efforts should be spared to achieve this aim.

    In his remarks, Mr. Bismarck Rewane, who chaired one of the panel discussion, said: “The consequence of doing nothing is that the problem never goes away.”

    It may be recalled that the CBN had suspended foreign currency funding for about 41 imported items which are considered a strain on Nigeria’s already dwindling foreign reserves in June 2015.

    The policy which has been met by Nigerians with mixed feelings, affects various business sectors and SME products ranging from vegetable oil to palm kernel, wooden fabrics, even toothpicks and many other items.

    While admitting Nigeria is in dire a crisis, Dr, Eniola Ajayi of Consumer Advocacy Foundation of Nigeria (CAFON), however argued that the CBN needs to sit down with other ministries and departmental agencies to determine what the economic policy for the country will be in the short term, medium term, and long term.

  • ‘Review forex policy’

    ‘Review forex policy’

    The Lagos Chamber of Commerce and Industry (LCCI) has called on the Central Bank of Nigeria (CBN) to review its foreign exchange policy for imported goods.

    The LCCI made the call in a statement by its Director-General, Muda Yusuf.

    The chamber disapproved of the apex bank’s policy which restricted 41 imported goods from accessing foreign exchange from the bank.

     It said the policy would serve as a disincentive to the  manufacturing sector and the economy.

    The statement said the restricted items included critical elements of the manufacturing process of many firms, across sectors in the country.

    “The policy means that manufacturers who require any of the 41 restricted items as inputs and raw materials for their production may have to simply shut their operations once their existing stock is exhausted.

    “The LCCI understands the CBN’s constraints and circumstances, as it drew up this policy.

    “It, however, appears as if the formulation of the policy has suffered from the CBN’s limited understanding of the manufacturing process of many of the sectors affected by this policy.”

    The News Agency of Nigeria (NAN) recalls that the CBN on June 23 said it was imperative to exclude importers of some goods from accessing foreign exchange.

    It added that the directive was aimed at encouraging local production of the items.

    The chamber, however, noted that the policy was ambiguous as the restricted items were not well-defined and specific.  It stated that the ambiguity had plunged both manufacturers and banks into confusion.

    It, therefore, urged the apex bank to amend the policy with full product definition, specification of all restricted items, including their HS Codes and excluding any items, which are non-substitutable industrial raw materials from the list.

    The chamber, therefore, called for appropriate time frames for items which required some interval before local substitutes can be created for imported raw materials.

    It reminded the CBN and the Federal Government that manufacturers had yet to recover from the losses they suffered due to the recent currency devaluation.

  • In defence of CBN forex policy

    The CBN would facilitate the creation of an ecosystem that will identify and link various local producers and processors with major importers of selected products. With the expected increase in local production, identified major importers would be encouraged to act as off-takers to local producers.”

    These were the words of the Central Bank of Nigeria’s Governor, Mr. Godwin Emefiele, while unveiling his 10-point agenda during his maiden world press briefing after assuming office on June 5, 2014. He had promised that under his leadership, the apex bank will dissipate its energies on building a resilient financial system that can serve the growth and development needs of our beloved nation, Nigeria.

    The bank, a few days past, announced that 40 items of goods that Nigerians have capacity to produce and in which we have the human and natural resources have been removed from the forex window. This decision gave bite to the mission statement of the CBN “to be the Model Central Bank delivering price and financial system stability and which will promote a sustainable economic development”.

    The import of the decision by the bank to officially stop the sale of dollars and other foreign currencies to importers of rice, cement, palm kernel/palm oil/vegetable oil products and steel sheets, among others, should not be lost on us.  Essentially, it is to galvanise the economy, boost local production and grow the economy.

    This, indeed, is a warming signal to make Mr. Emefiele’s vision not only a reality, but the determination of the CBN as a development institution to grow the economy, as well as enhance the capacity of local entrepreneurs to create employment and wealth, thereby reducing pressure on the naira and protect the nation’s foreign reserves.

    He further said that whosoever is desirous of importing such goods, should use his own money to do so. Aside depleting the national reserves and easing the pressure on the naira as some of the reasons for the action, empowering local entrepreneurs and creating jobs is what Nigeria needs now, as her growing unemployment rate is alarming. Secondly is the resuscitation of local industries.

    Recent developments in the world’s oil market is another reason one could adduce for the CBN’s action which made imperative the clamour for diversifying the economy away from dependence on oil. It is baffling to note thatNigerian businessmen have been creating jobs and wealth in other nations, while theirs wallow in poverty when these imported goods can be produced in Nigeria. But unfortunately, they have contributed in killing the local industries. Many factories are in comatose or have shutdown with attendant job loss.

    In the case of rice, Nigeria has greater and better capacity to meet local demand. The immediate past Minister of Agriculture and Natural Resources, Dr. Akinwumi Adesina recently put Nigeria’s importation bill of four items at about N1.6 trillion yearly. This should be worrisome to a nation with over 170 million people, not to mention her numerous natural resources that if harnessed, can feed not only Nigeria, but Africa.

    Emefiele while addressing the media on this latest development, looked visibly angry that Nigeria in the 21stcentury, imports toothpick. This indeed is a shame. Preference for foreign products is the reason why many of our industries are not doing well, or are shut.

    According to him, the pressure on the naira and gluttonous demand by Nigerians for foreign goods, is one of the reasons why the naira has to be devalued late last year.

    Sharp practices, mindless speculation and rent seeking in the foreign exchange market were responsible for the closure of the RDAS/WDAS foreign exchange window by the CBN, so was the bank’s action on dollarisation of the economy in which it cautioned those who take pleasure in using dollars as medium of payment for goods and services.

    Nigerians should therefore see the decision by the CBN as clearly restating Mr. Emefiele’s vision which he drew from the bank’s mandate to pursue both price and financial system stability, as well as provide complementary developmental functions by creating favourable environment for Nigerians to live better and be more fulfilled in life.

    Benchmarking this paradigm shift against other policies ever taken by the bank, it was a surprise to read in the media various criticism of the exemption, particularly the one from Lagos Chamber of Commerce and Industries (LCCI), an organisation that had in the past praised the CBN under Emefiele.

    Agreed that the latest action may bring a temporary dislocation and disruption in the system as we all know, the long run effect and impact on the economy, and what Nigerians and the economy will benefit, should be paramount.  LCCI was quoted to have said that many of the products on the list are intermediate goods and critical inputs for the manufacturers, and other major sectors of the economy. It also argued that the Bureaux de Change sub-sector which ought to serve as alternative source of foreign exchange window for businesses, is not deep enough to meet the demand of the essential intermediate products on the exclusion list. Its chairman, Alhaji Remi Bello, was quoted to have concluded that the action by the CBN amounted to import prohibition which will create hic-up in the economy. On this, I beg to disagree.

    The CBN is ready and willing to support the real sector of the economy, but not the toothpick, tooth paste and tomato sauce importers. Our local capacities to produce and meet our needs are available, and massive, if only Nigerians can appreciate and be patriotic enough to patronise home-made goods.

    The preference and crave for imported goods is killing or have killed many industries. This action may look painful in the interim, however, it will give vent to many intervention support of the bank to grow the economy, particularly, in agriculture, power, health, oil and gas, among others. Locally made goods have been tested and confirmed to be better in quality than their foreign counterparts, if only we will appreciate ourselves.

    The CBN’s new order therefore will help check the drain on the national reserves and reduce the undue pressure on the naira, thus making it strong. Nigeria and most importantly, in this critical time needs to look inward. Ghana, Nigeria’s neighbour has also expressed her intension to announce some items to be removed from her forex window.

    These are reality times. Every nation is on soul-searching, wondering on how they got to where they are today, and Nigeria should not be an exception. We should by now be feeding ourselves. We have the capacity and the resources.

    Thus, Nigerian investors and business men should embrace this patriotic move of the CBN and partner with the CBN. The end result of this development is employment, wealthcreation, self-sufficiency and boost in Nigeria’s gross domestic product.

    We need to grow our productive capacity, and encourage particularly, the rice producers who have shown great capacity not to only feed Nigeria but Africa at large.  The steel sector – Ajaokuta Steel Rolling Mills, Oshogbo Steel Rolling and Aladja Mills can be revived to meet the nation’s steel requirements. The Dangotes in cement production, the furniture makers need to be supported and encouraged, so are the local fish farmers. Youth commercial agricultural scheme established to draw energeticand enterprising youths to farming should be made more attaractive to achieve set goals, not the portfolio carrying investors disguising as businessmen, but engage in rent seeking and round tripping, veiling their criminal activities by importing toothpicks, toothpastes or tomato pastes and destroying our localproduction potential and economy.

    The CBN is commended for this, the management is however enjoined to match its word with action by ensuring that infractions of this directive is severely punished and not pander to the pretentious critics who meant no well for this country.