According to the Vice President Yemi Osinbajo, Nigeria is currently working on replacing the 41 items not valid for foreign exchange with more trade policy-driven restrictions.
In mid-2015, the Central Bank closed the interbank FX window to 41 items to reduce pressure on the depreciating Naira.
In a speech delivered earlier this week by Osinbajo on Buhari’s economic plan, he assured Nigerians that “there is light at the end of the tunnel”. Osinbajo explained that the Government and CBN are working on replacing the 41 items not valid for foreign exchange with a more trade policy-driven restrictions, taking into account those items that are required and locally unavailable raw materials. This comes in line with their focus on aligning fiscal with monetary policy and nudging the CBN towards the objective of more market determined exchange rates that led to the introduction of the Nigerian Autonomous Foreign Exchange Rate (NAFEX).
Of all the 41 items published, 19 (46%) were directly related to the construction sector including roofing sheets, iron rods, reinforcing bars, tiles, cement, wooden doors and many more. The construction sector was in free fall since the items were published as it worsened the decline in an already slowing sector as most of the materials required for construction in Nigeria are typically imported.
Ongoing initiatives geared towards better access to FX together with this new development should be received well by many market participants.