The Central Bank has said that the status quo remains on the 43 non-eligible items banned from the forex market introduced under Godwin Emefiele leadership as CBN Governor.

The items are not permitted to be funded from the I & E window.

This is according to the information contained in the Q&A document published by the central bank explaining the new Operational Changes to the Forex Market.

The report is titled “Understanding the Operational Changes to the Forex Market” and it is published on its website.

What CBN is saying: In the part of the Q&A report which asked “Can the 43 Non-Eligble Items access FX at the I&E window” the response was “The status quo remains on the 43 non-eligible items. The items are not permitted to be funded from the I & E window.”

This confirms the central bank will continue to implement the ban on the 43 items suggesting the government will continue with import substitution as they seek to keep protecting the local market.

Godwin Emefiele was suspended on Friday the 9th of June due to an ongoing investigation carried out by the Tinubu administration. Emefiele has staunchly supported this policy.

Flash Back: The central bank released a circular on June 24th, 2015 detailing that it had banned a list of 41 imported goods and services from accessing the official Nigerian Foreign Exchange Market.

Over the years, the CBN has been modifying this list by including more items and in 2020 added maize/corn, which is a widely-consumed staple food in the country.

In an event 5 years ago. Godwin Emefiele emphasized why the ban will remain stating that it had led to remarkable success in domestic production of the goods in question. As such, its implementation would be intensified.

“Given the remarkable success that has been achieved in stimulating domestic production of goods such as rice, cassava, and maize, as a result of the restriction placed by the CBN on access to forex for these items, the CBN intends to vigorously ensure that this policy remains in place and additional efforts will be made to block any attempts by unscrupulous parties. I mean both individuals and corporates that intend to find other avenues of accessing forex, in order to import these items into Nigeria.”

Support for lifting the ban

Several stakeholders in the economy have called for the ban to be lifted claiming it has done more harm to the economy than good.

In a recent interview with Nairametrics, Dr. Muda Yusuf CEO of the Center for the Promotion of Private Enterprise called for the Ban to be lifted.

Investors in the Nigerian economy are grappling with an aberration of CBN incursion into the trade policy space. Through the instrumentality of its foreign exchange policy, the CBN has created a parallel trade policy, creating even more confusion in the trade policy environment.

The CBN has a foreign exchange exclusion list containing items for which foreign exchange would not be made available for imports. In practical terms, it is the CBN version of an import prohibition list, as the banks would make important documents available for transactions relating to any item on the list. The contention of the CBN was that the items on the list can be sourced locally.

This is an assertion that many stakeholders disagree with. The exclusion list has done more harm than good to the economy. Besides, it is an anomaly to have two parallel import prohibition lists for the same economy.

The Tunubu government appears to be happy with this policy and by this report seems focussed on supporting the local industry.

What this means: The implication is that businesses seeking to purchase goods and services that are on the list will have to access the parallel market.

If the demand for such items is higher than what is obtainable in the official market then this could affect the central bank’s ability to achieve exchange rate stability and close the disparity between the official and black market rate.