The Central Bank of Nigeria (CBN) is considering halting the sale of dollars for imported goods that are already manufactured in the country as it seeks to reduce pressure on the naira hit by a drop in oil prices.

“The only thing that will reduce pressure on our currency is by producing those things we are importing today,” CBN Governor Godwin Emefiele was quoted by Bloomberg during an interactive session with the private sector on Tuesday in Lagos.

“We will try as much as possible not to hurt your business, but we need to be able to work together,” he added.

Africa’s largest economy is struggling to deal with a decline in crude prices near the lowest in six years, sales of which bring in more than two-thirds of government revenue.

The central bank devalued the naira in November and raised the benchmark interest rate to a record 13 per cent.

The central bank that month also banned the use of dollars purchased at its twice-weekly auctions for the importation of items including electronics, telecommunication equipment and generators.

The regulator “will meet legitimate demand, but we will not be concerned about illegitimate demand,” Emefiele said. If the central bank allowed the naira to trade more freely (free float) then “it will lead to a major depreciation” as Nigeria is not yet an export-driven economy, he said.

According to Emefiele, the speculative demand for the greenback observed in the foreign exchange market may compel the central bank to stop allocating dollars for the importation of certain category of items, such as rice, that can be produced in the country.

“We are not going to ban the importation of rice, but we are going to say we would no longer provide foreign exchange if you want to import rice into this country. If you want to use your dollars that you got from somewhere else to import rice, no problem!

“But with the way we are going, we would not allocate foreign exchange for you to import rice. The same way we would graduate it to other products.

“We have seen the pressure in the forex market arising mostly for the lopsided dependent on imports. Today in Nigeria, toothpick, tomato paste, furniture, rice, sugar, fish, petroleum products are all being imported into Nigeria.

“Perhaps, I want all of us to know that if we import one cent worth of toothpick, it impacts on the external reserves. So why should we be seen to be importing items that can be produced locally?for more-http://www.thisdaylive.com/articles/cbn-may-stop-forex-sales-for-goods-that-can-be-made-in-nigeria/200341/

Neccessity is the mother of invention, people will now dig deep to produce all this now.

nice move. delay is dangerous.

How on earth are you just doing this now !!!!

Unfortunately we have a booming black market for the dollar so this move may not exactly have its intended effect

First they should stop the sales of forex to petroleum product importers. That's the major source of siphoning our forex, nothing more nothing less.

just a Joke.

slimfit1:
How on earth are you just doing this now !!!!

timing is of great importance. If this policy was done when the economy was OK, majority of Nigerians would have criticised the governor, with excuses of no power to encourage local production and all. So with this timing no body,including my Igbo brothers will say you are killing our business because you can see the effect it has on the economy.

This should have been the backbone of our economic policy for years now but doing it now at the rush hour is not a genuine policy

dlox147:
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“...If you want to use your dollars that you got from somewhere else to import rice, no problem!

You are not going to ban importation of rice but if one has dollars stashed away (from public fund), one can import. No problem

I can now see clearer where this country is heading to

Someone is taking a cue from Buhari!

If eventually this policy is achieved, Nigeria will attain that great feat.

Make e no just b mouth yarns oo!

I like this Emefiele Guy...GMB would enjoy working with him.