The Central Bank of Nigeria (CBN) has lifted the restriction on 41 items listed as ineligible for foreign exchange, with a condition.
CBN
In a circular exclusively obtained by Reuters on Thursday, the Central Bank of Nigeria (CBN) has lifted a ban on currency allocation for importers bringing in goods worth up to $20,000 per quarter.
The
bank in 2015 placed a restriction on 41 items for which importers could
no longer get dollars, including rice, toothpicks, cement, private
jets, steel products, plastics and rubber, soap, cosmetics, furniture, Indian incense and foreign bonds.
Aimed
at conserving its foreign reserves, the move curbed access to dollars
for importers bringing in a wide range of goods, helped fuel the
currency black market and worsened investor perceptions about policy in
Africa's biggest economy.
"Importers of items
classified as not valid for forex with transactions value of $20,000 and
below per quarter shall now qualify for allocation of foreign exchange," the bank said.
Last
month the bank cut the amount of paperwork needed for small firms to
buy dollars, to ease doing business and help narrow the gap between
official and black market exchange rates. It said it will offer them up
to $20,000 per quarter.
Nigeria introduced capital
controls in 2015 after a sharp fall in oil prices caused chronic dollar
shortages, weakened its currency and slashed government revenues,
tipping the economy into its first recession in a quarter of a century
last year.
It subsequently introduced and then
abandoned a currency peg and now uses a system of multiple exchange
rates which the bank says help it manage "frivolous" dollar demand.
The
naira was quoted weaker on Thursday at an investor trading window, at
382.14 per dollar, data from market regulator FMDQ OTC Securities
Exchange showed. The official market rate was 305.20 and the black
market rate 391.
Vice President Yemi Osinbajo had
said on Tuesday that Nigeria aimed to replace the list of 41 import
items with more trade policy-driven restrictions taking into account
items that are required and locally unavailable raw materials.
The
central bank has pledged to sustain its currency intervention to help
narrow the spread between the official and black market rates, its
spokesman Isaac Okorafor said.
In theory, greater
liquidity should lead the rates to converge. The bank offered to sell
$150 million at an auction on Wednesday and sold $65.94 million previous
day. It planned to sell its weekly $20,000 each to exchange bureaus,
Okorafor said.