The House of Representatives has resolved to invite the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, over the bank’s decision to lift the restriction on forex supply on 43 imported items.
The decision was sequel to the unanimous adoption of a motion by Rep. Sada Soli (APC-Katsina State) at plenary on Tuesday.
Some of the items include rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, poultry and processed poultry products, tinned fish in sauce (Geisha) or sardine, cold-rolled steel sheets, and galvanized steel sheets, among others.
Moving the motion, Mr Soli recalled that the CBN imposed the restrictions in June 2015 to conserve the foreign exchange reserves and promote local production of certain goods, including about 11 food items.
He recalled that on October 12, the apex bank announced, among other issues, the lifting of forex restrictions hitherto placed on 43 items.
According to him, some of the items have tariffs to protect local industries, as they are part of the import prohibition list.
Mr Soli expressed concern that the decision of the bank will greatly affect the local production of items such as rice, cement, and palm oil, among others.
The lawmaker said that it will force local manufacturers to hold the short end of the stick, leading to factory closures and ultimately eroding capacity to build the country’s local economy.
“Almost all the 43 items are from two critical sectors, which have been identified by all policy documents from NEEDS and SEEDS to Vision 2022 as areas that are critical to economic diversification.
“Worried that some of the listed items enjoy 60 to 70 per cent subsidy from their countries of origin, thus putting Nigeria’s local products at a comparative disadvantage and without any protection, and will lead to job losses and social exclusion;
“Also worried that the benefit of the cheaper imported inputs, as stated by the CBN, will give undue advantage to middlemen to drive the economy, which is inimical to our economic growth and not suitable to the current unified FOREX market in the country.
“Further worried that Nigeria will not be competitive in the African Continental Free Trade Area if our markets are flooded with imported finished goods.
“The decision followed the rising food inflation in the country, which has significantly impacted the economy and the purchasing power of consumers in the country,” he said.
Mr Soli said that lifting the forex restriction on the importation of 43 items may not have a meaningful impact on the rising food inflation as a result of the soaring exchange rate.
In his ruling, the Speaker of the House, Rep. Tajudeen Abbas, pursuant to Section 8(4)(a)(b) and Section 5(b) of the CBN Act, 2007, said that the CBN governor should be invited.
He mandated the committees on customs and finance to interface with the governor to explain the reasons for the decision.