The West African nation’s government will consider “policy-driven restrictions” to promote local manufacturing of 41 items such as rice and toothpicks, Osinbajo said in an emailed copy of a speech on Tuesday.
Ending the ban could be the latest easing of
foreign-currency trading restrictions by the Central Bank of
While many importers of listed items have sourced foreign currency from the black market at a premium as high as 30 percent, the central bank defended the policy, saying it encourages domestic production and conserves foreign reserves.
Read also: Nigeria central bank to sell $150 million
“This is a good development for particularly small
manufacturing companies; a number of them had been complaining that the supply
of some of the items locally is small, some do not have local supply,”
Pabina Yinkere, head of institutional business at Lagos-based Vetiva Capital
Management, said Tuesday by phone. Still,
Last month, the central bank introduced a foreign-exchange window for portfolio investors to trade currency at market-determined rates. The central bank removed a peg of 197-199 naira per dollar after more than a year in June, even as it continued with regular interventions to keep the currency from weakening below 315 against the greenback.
Removing currency-trading restrictions is welcome and if the
government wants to regulate certain imports that “should be controlled by the
fiscal authorities with the use of tariffs, rather than monetary policy or FX”
measures, Ayodeji Ebo, head of research at Afrinvest West Africa Ltd. said by
“In stabilizing the macroeconomic environment, we have focused on aligning fiscal with monetary policy and nudging the central bank toward the objective of more market-determined exchange rates,” Osinbajo said.