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CBN to punish banks for forex rule violation

By on June 26, 2015

The Central Bank of Nigeria has said it will punish Deposit Money Banks and Bureaux de Change that sell foreign exchange to importers of rice, toothpick, tomato paste and private jets, among others, into the country.

The CBN Governor, Mr. Godwin Emefiele, stated this on Wednesday during a special media briefing held in Abuja to explain the rationale behind the new policy banning the sale of forex for the importation of some items.

The bank had on Tuesday issued a circular stopping the sales of foreign exchange to importers of 40 times.

Emefiele explained that the change in policy was in line with the government’s long held believe that Nigeria could not attain its true potential by importing everything.

The governor noted that despite the impressive Gross Domestic Product growth rate, which the country had recorded over the years, the corresponding reduction in unemployment and poverty had been absent.

The governor said the CBN would ensure that the ban on the sale of forex to the importers of the items was enforced, noting that any bank that violated the new policy would be sanctioned.

He said, “In the case of yesterday’s (Tuesday’s) announcement, I am happy to underscore that this policy change is in line with our long held believe that Nigeria cannot attain its true potential by importing everything into the country.

“At some point in our lives, we have to all decide what we really want for our country and I believe that the time is now ripe for that conversation.

“Let me also reiterate that the CBN will continue to be vigilant around this policy and will keep reviewing the list of items until we become comfortable that the items that can be produced locally are sufficient enough.

“We will continue to review this list and it is possible that by tomorrow, we will add one or two more depending on our own assessment of the market and our own assessment of the industry to see to the fact that if we restrict allocation of forex for the importation of these products that it will not duly hurt our people.”

He added, “Foreign exchange will not be provided by the central bank or by the banks or by the Bureaux de Change. If we find people flouting it, luckily these people we mention are under our regulation, and we will deal with them”

Emefiele lamented that while the CBN had in recent times taken measures to increase forex allocation to pivotal sectors of the economy with a view to stimulating increase output and creating jobs on a massive scale, the level of importation of basic products had not reduced.

He said, “The huge amount of money the country spends on importing things we can produce locally has become a significant drag on our foreign exchange reserves.

“Most of you are aware of the often quoted number of N1.3tn, which is what we spend on the average annually importing rice, fish, sugar and wheat into Nigeria. Each time I ponder these issues, many vexing questions trouble my mind.”