Forex: Nigeria Lost $1.4 billion Over Restrictions

According to the Central Bank of Nigeria (CBN), Nigeria has lost approximately $1.4 billion over the restriction of forex to 43 items by the Central Bank under the leadership of Godwin Emefiele.

The Deputy Governor of the CBN in charge of Economic Policy, Muhammad Sani Abdullahi stated this during an appearance before the senate committees on banking and finance today.

According to the CBN official, the denial of access to forex for the 43 items contributed to the skyrocketing inflation currently witnessed in the country.

He further clarified that the CBN did not ban the importation of those items since it is not a trade regulator and the responsibility for allowing goods into the country rests on the fiscal side of the economy.

“When we resumed at the bank, we realized the bank has been involved in areas which were not central banking. One of them is trade policy. Central banks do not have responsibility for trade policy. It is a fiscal issue.”

“What happened was that 43 items were identified and denied foreign exchange. They were never banned from the borders.”

“What it resulted in was that the country collectively lost $1.4 billion between 2015 and 2019 because of the FX ban on these particular items. The second part is that they fuelled inflation as it increased the prices of
these products.”

He noted that the reason for the bank’s decision to allow access to these items was to remove the “distortions” in the market and the ban was one of them.