The Director General of
Lagos Chambers of Commerce and Industry (LCCI), Mr Muda Yusuf, has commended the Central Bank of Nigeria (CBN) for its effort to reduce the pressure on the foreign exchange market.
He gave the commendation in an interview with newsmen Thursday in Lagos.
The CBN,on June 24, stopped the sales of foreign exchange from official sources to importers of rice, private jets, textiles, tomato paste, poultry products and 35 other times.
The CBN said that the implementation of the policy would help to conserve foreign reserves and facilitate the resuscitation of domestic industries as well as generate employment.
Yusuf said that the development showed that the apex bank was concerned about the pressure on the foreign exchange market which had led to the devaluation of the naira.
He also said it was obvious that the nation needed to moderate the demand for foreign exchange and boost the country’s external reserves.
Yusuf ,however, said that items on the list of products excluded from the foreign exchange market should be reviewed, adding that some “are intermediate products in which the country has limited domestic production capacity”.
‘’An example is the iron and steel products which are critical for use in the construction sector, housing and development of infrastructure,’’ he said.
Yusuf said that situation could pose the risk of widening gap between inter-bank forex and parallel market rates which could lead to round tripping of foreign exchange.
‘’This structure of pricing is fraught with a lot of abuse and corruption; this is a major problem to watch out for in this new policy.’’
The LCCI boss said that improved productivity and competitiveness in the economy should be encouraged, while issue of high cost of production needed to be urgently addressed.
He suggested that the nation’s industrialisation strategy should be anchored on the key principles of competitive and comparative advantage.
Also a former CBN Director, Mr Titus Okurounmu, said that the situation in the foreign exchange market demanded that the CBN continued to rationalise foreign exchange resources.
Okurounmu said that the drop in the foreign reserves might continue as the nation was not generating much from the sale of crude oil at the international market.
He said that importers would continue to find ways to bring the affected items into the country until the nation was self-sufficient.
The former researcher advised that the Federal Government should ensure that the country moved away from being an import-dependent nation to export-dependent nation.
“It is not just about denying importers the access to foreign exchange from the CBN, the government should also ensure that the nation’s refineries work.
‘’Once the government is able to generate power for electricity, then manufacturers would regain confidence in the system and the situation changes.
‘’The situation at the forex market is a reflection of the situation in the whole economy,’’ he said.