The Governor of the Central Bank of Nigeria, CBN, Olayemi Cardoso said Nigeria lost a total of $1.4bn in 8 years over CBNs ban on 43 items.
Cardoso disclosed this at the 58th Annual Bankers Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) on Friday, in Lagos.
According to him, the 43 items were never explicitly prohibited from importation or sale in Nigeria. He, however, explained that the apex bank had implemented restrictions on accessing foreign exchange for the importation of these items.
Cardoso emphasised that the issue of trade policy, specifically the importation and sale of the 43 items, was primarily within the domain of the fiscal authorities, not the CBN. This distinction, he said, was important because it clarifies that the CBNs decision to lift the foreign exchange restrictions on these items was not intended to encroach upon the responsibilities of other government agencies.
Recall that the CBN had in a circular in June 2015, published a list of imported goods and services that will not be eligible for foreign exchange in the Nigerian foreign currency market.
The list, which was originally 41, was updated to include two more items. But the CBN, precisely on October 12 2023, announced that it had lifted the ban on the issuance of foreign exchange for the importation of rice, vegetable oil, and poultry products among other 43 items.
Cardoso added that revenue from tariffs on goods decreased from a high of approximately $920 million in 2011 to about $250 million in 2017. He said the reduction in trade restrictions and levies on rice, sugar, and wheat by 50.0 percent had only a minimal impact on welfare, with a 0.8 percent improvement, and a mere 0.4 percent reduction in extreme poverty.
Cardoso explained that the benefits of trade gains for the general population were negligible, as the average industry in Nigeria pays 13.7 percent more for its inputs. According to the CBN, this action will boost liquidity in the Nigerian foreign exchange market and intervene from time to time, adding that interventions will decrease as liquidity improves.
