Nigeria will keep foreign currency restrictions for now to preserve the country’s currency reserves amid falling oil revenues but the Central Bank of Nigeria (CBN) will ease the rules in the long-term, Vice President Yemi Osinbajo has said.
The current “restrictions are definitely short term. There is no question about that,” Reuters quoted Osinbajo as telling reporters late on Saturday.
“So, long term, we expect that the CBN will ease restrictions as we go along,” He added.
The CBN Governor, Godwin Emefiele, had defended its decision to tighten foreign exchange controls by excluding 41 items from the interbank forex market a few months ago.
According to a statement by the CBN, the country spends an estimated N1.3tn annually on items that could be manufactured locally.
Emefiele maintained that the huge amounts of money Nigeria was spending on importing things that could be produced locally had become a significant drag on the nation’s foreign exchange reserves.
But the Lagos Chamber of Commerce and Industry (LCCI) and other market analysts have warned that the policy could lead to the closure of many factories.
They also noted that the policy had caused considerable pressure on the Bureau de Change segment of the market and also widened the gap between the official and parallel forex markets.
United States lender, JP Morgan, had last month expelled Nigeria from its Government Bond Index-Emerging Market over issues relating to lack of transparency in the nation’s forex market.
By Pita Ochai