Despite the unavailability of forex for banned items by the Central Bank of Nigeria, Nigerians imported five items worth N543bn in the first quarter of 2023, findings by Sunday PUNCH have shown.
According to an analysis of the recently released Nigerian Foreign Trade reports by the National Bureau of Statistics, items such as crude palm oil, vegetable products, animal products, meat and vegetable fats and oil were imported from various countries in three months.
The CBN had categorised about 41 import items as not valid for forex, which means that the importer will not be able to get forex from the apex bank for such items.
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The apex bank said the restriction was part of efforts to sustain the stability of the foreign exchange market, ensure effective utilisation of foreign exchange and the derivation of optimum benefit from goods and services imported into the country.
However, these items were not banned or prohibited by the Nigerian Customs Service, thus they could still be imported.
Analysis of the data showed that imported vegetable fats and oil goods got a total of N42.36bn, vegetable products got N344bn, animal products recorded trade of N122.47bn while mackerel meat got N17.05bn with imports from Chile, Ireland, Norway, South Korea and Netherlands.
Further breakdown showed that crude palm oil got a total of N17.02bn with imports from Malaysia and China.
A recent report from the Malaysian Palm Oil Council shows the country’s palm oil import from Malaysia increased to 92,961 metric tons between January and April 2023, from 20,513 MT in the corresponding period of 2022. This indicated a 72,448 MT increase.
According to experts, the increase was due to the huge demand-supply gap as primary production of palm oil had been seriously neglected by various governments.
The Managing Director, Palmtrade and Commodities Development Nigeria Ltd, Henry Olatujoye, stated, “We estimated that our local/domestic consumption is averaging 2.4 million tons in a year, and our first-class developers – Okomu, Presco, and others, do not annually produce up to 800,000 tons. If we estimate the pocket smallholder farmers to be contributing up to a million tons, we would still have a shortfall compared to demand.”
In an earlier interview, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, described the forex ban list by the central bank as an “aberration”, explaining that the banned items were legally acknowledged in the nation’s trade policy document.
Yusuf stated, “The list itself is creating confusion in our trade policy because it is only fiscal authorities that should determine what you can import and not import. What the CBN has done is unusual and is an aberration because the trade policy of any country is documented in its fiscal policy; a trade policy document which will show the tariffs and items under import and export prohibition. That means you can’t import those products.
“When you have that document by concerned authorities, the CBN now has its own list of items which you can’t officially source foreign exchange for them, so it creates a lot of confusion in the system. What needs to be done is harmonisation and it is not the duty of the apex bank to decide what items to give forex for. That is a trade policy decision.”
He explained that the ban could be considered to be a major factor in the gap between the official exchange rate and the parallel market.
In the same vein, a financial analyst and Managing Director, Cowry Asset Management Limited, Johnson Chukwu, advised the government to prioritise local production of goods to reduce the country’s dependence on imports.
Chukwu added, “In the first place, if we have sufficient supply of those products, it would not be advisable for anyone to import them.”
(Punch)
