The Central Bank of Nigeria, CBN, on Monday, August 22, directed commercial banks and other authorised dealers in the foreign exchange market to ensure that that 60 per cent of total FX purchases from all sources are earmarked for importation of raw materials, plant and machinery.
The apex bank said it took the decision following its review of returns on the disbursement of FX and observed that a negligible proportion of FX sales were being channelled towards the importation of raw materials for the manufacturing sector.
The CBN gave the directive in a circular signed by its acting Director, Trade and Exchange Department, Mr. W.D. Gotring. The letter dated August 22, 2016, was posted on the central bank’s website.
“Following the review of returns on the disbursement of foreign exchange to end users, it has been observed that a negligible proportion of foreign exchange sales are being channelled towards the importation of raw materials for the manufacturing sector,” it said.
“Against this background and in order to address the observed imbalance, authorised dealers are hereby directed to henceforth dedicate 60 per cent of total foreign exchange purchases from all sources (interbank inclusive) to end users strictly for the purpose of importation of raw materials, plant and machinery.
“The balance of 40 per cent should be used to meet other trade obligations, visible and invisible transactions. For the avoidance of doubt, authorised dealers are to continue to publish weekly sales of FX to end users in the national newspapers and to render statutory returns on same to the CBN promptly. Please ensure compliance accordingly, until otherwise advised.”
The President of the Manufacturers Association of Nigeria (MAN), Frank Jacobs, recently voiced concerns that the FX scarcity and rising cost of funds had sent manufacturing output plunging to below 20 per cent.
However, with the directive, analysts said yesterday that manufacturers would be able to get a substantial part of their FX requirements met.