The World Bank has advised the Central Bank of Nigeria to terminate its foreign exchange restrictions on 41 products.
According to the report, titled,”Nigeria Development Update (June 2023): Seizing the Opportunity,” the body stated that this would complement efforts to reduce inflation through a sequenced and coordinated blend of monetary, fiscal, and trade policies.
The CBN has designated 41 import articles as ineligible for foreign exchange, meaning that importers cannot obtain foreign currency through the official window.
However, the Nigerian Customs Service did not prohibit or restrict these items, so they can be imported. According to a previous analysis conducted by PUNCH, nine products worth N18.12tn were imported between 2016 and 2022.
The global bank claims that the existing trade restrictions have a detrimental impact on income, domestic competitiveness, and poverty, while the import ban raises living expenses.
The bank suggested that as a remedy, import restrictions be replaced with tariffs that mirror the Common External Tariff of the Economic Community of West African States.
It stated,” The current restrictive trade policy in Nigeria has a negative impact on poverty, revenue and domestic competitiveness. The current import ban of staple foods drives up the cost of living, while FX restrictions on imports harm Nigerian firms’ competitiveness, increase inflation and poverty and reduce customs revenue.
“Remove the 43 items from the list of FX restrictions and replace import restrictions with tariffs that reflect the Economic Community of West African States Common External Tariff.”
