Avoid market suppression tendencies, CPPE warns CBN

October 12, 2023

The Centre for the Promotion of Private Enterprise [CPPE] has lauded the Central Bank of Nigeria (CBN) over its decision to discontinue the forex exclusion policy on the 43 items. This is even as the group warned the CBN to avoid market suppression tendencies, especially outside the I and E window.

In a statement signed on Thursday by the CPPE Director/CEO, Muda Yusuf, the group said that the fiscal authorities should continually monitor the economic landscape to shape the character of fiscal policy measures to regulate imports in line with comparative advantage principles.

According to the CPPE statement, “We welcome the decision of the CBN to discontinue the forex exclusion policy on the 43 items.

“It is a move in the right direction. It is part of the policy normalisation process.

“The exclusion of the 43 items was one of the several drivers of distortions in the forex market.

“The exclusion of the items also contributed to the persistent divergence in rates between the official window and the parallel market.

“The exclusion was also in conflict with extant trade policy as the items were not under import prohibition in the first place.

“It was an example of a lack of policy coordination under the previous administration.

“The new directive will also improve transparency and disclosures in foreign exchange transactions.

“Meanwhile, the CBN should avoid market suppression tendencies, especially outside the I and E window. All policy impediments to forex inflows should be removed.

“The fiscal authorities should continually monitor the economic landscape to shape the character of fiscal policy measures to regulate imports in line with comparative advantage principles.

“We need to worry about the risk of import surge. There is also a need to upscale the use of fiscal policy measures to boost domestic production and productivity.”

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