Forex Restriction: CBN Rejects IMF’s Call for Reversal

RateNigeria's Central Bank Governor Godwin Emefiele
  • Forex Restriction: CBN Rejects IMF’s Call for Reversal

The Central Bank of Nigeria (CBN) has rejected calls by the International Monetary Fund (IMF) to reverse the foreign exchange policy that restricts importers of 43 items that can be manufactured locally from accessing forex at the official rate.

Governor Godwin Emefiele, CBN, who spoke at the end of the 2019 International Monetary Fund and World Bank annual meetings in Washington Dc, disagreed with the fund and insisted that investors interested in doing business in Nigeria must do so by producing locally instead of just importing and selling to the Nigerian people.

He said: “Nigeria is a market of over 200 million people. So, you do not have a choice than to come, bring your investment plans and equipment and produce that item in Nigeria so that Nigerians can consume it.

“Then, you will make your profit and take your dividend out of the country.

“So, I disagree with that position that foreign exchange restriction is hurting investment inflow into Nigeria.”

On the new Unstructured Supplementary Service Data (USSD) fees, he said the disagreement is between telecom operators and deposit money banks.

He said: “I understand that about three to four weeks ago, rather than reduce it, they went ahead to increase from N1500 to N4500, which is a 300 percent increase. I opposed it and I have told the banks that we would not allow this to happen.

“The banks are the people who give these businesses to the telecoms companies and I leave the banks and the telecoms companies to engage.

“I have told the banks that they have to move their business and move their traffic to a telecoms company that is ready to provide it at the lowest possible cost if not at zero cost and that is where we stand and we must achieve it.”

The Governor, however, said lenders had done well concerning the 60 percent Loan to Deposit Ratio (LDR) policy.

“Most of them have worked with us and we saw loans rising from about N15.3 trillion in the banking industry in July to, as at the last time we held the meeting, about N16.3 trillion, which is a remarkable and phenomenal increase.

“These loans are being channeled not only to agriculture, but to manufacturing, to Small and Medium Enterprises (SMEs), and consumer credit.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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