CBN: We May Cut Forex Support On Rice Importation, Others

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has revealed plans by the bank to stop foreign exchange support for the importation of some commodities such as rice, if the pressure on the naira does not recede.

Speaking during a meeting with stakeholders in the organized private sector in Lagos yesterday, Emefiele stressed the need for local production of most of the commodities that are presently imported into the country, so as to strengthen the naira and develop the country.

“In the course of time, we are not going to ban the importation of rice but we are not going to provide foreign exchange if you are going to import rice into the country. So if you are interested in rice, I will advise that you go into the production of rice,” said Emefiele.

“If you want to use your dollar that you have kept somewhere, there is no problem but at some point we will not allocate foreign exchange for you to import rice. The same way, we will graduate it other products.”

Emefiele, while dispelling fears of a further devaluation of the naira and the ability of the CBN to continue to defend the currency, however, gave the assurance that the apex bank will continue to provide foreign exchange for legitimate investors and businesses.

Stating that Nigeria had survived an oil price crash with $10 billion in reserves, he said $34 billion is enough to scale through the present oil price crisis.

“The important thing is that anyone who needs foreign exchange for legitimate purposes will get their Forex even when the interbank is unable to meet the demands in the market, the CBN will, from time to time, step in and we will provide the foreign exchange that is needed to meet everybody’s legitimate demand,” the CBN boss said.

For his part, business mogul and chairman of the Dangote Group, Alhaji Aliko Dangote, said that his company was planning to be the major seller of foreign exchange after the CBN by 2018. He also disclosed that Nigerian would be the biggest exporter of urea and ammonia by 2017.

He said, “Based on our plans we will be the highest foreign exchange seller in the market by the first quarter of 2018, and it’s not from just refinery alone – because if you do refinery alone you will not make money.

“The profit margin will not be that big unless the refinery is a huge one where you make gains based on volume. Today, we are doing 3.6 million tonnes of polypropylene and polyethylene, and even now with the crash of the price, those prices are not crashing on the same scale with oil; so even as at today’s prices, our exports are more than $7 billion. Our worry now is how do we export most of the other products – like aviation fuel, diesel. The only thing that we will not export is PMS,” he said.

Dangote also stated that the country cannot continue to import consumables and “things that we don’t even need.”

He urged Nigerians to get involved in manufacturing not only for local consumption but also for export.

 

Source: Leadership