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CBN: 41 items still banned under Nigeria-China currency swap deal

CBN: 41 items still banned under Nigeria-China currency swap deal
May 20
17:44 2018
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The Central Bank of Nigeria (CBN) says the Nigeria-China currency swap deal will not cover the importation of the 41 items already blacklisted from the official foreign exchange.

Isaac Okorafor, acting director, corporate communications, at the bank, made this known in an interview with NAN on Sunday.

He said this will ensure the currency deal does not stifle local companies and make Nigeria a dumping ground for Chinese goods.

In 2015, the bank said it would not provide forex for the importation of 41 items to ensure efficient utilization of forex and encourage local production.

The CBN recently signed a bilateral currency swap agreement with the People’s Republic of China worth N720 billion.

Some of the items banned were rice, cement, poultry, tinned fish, furniture, toothpicks, kitchen utensils, tableware, textiles, clothes, tomato pastes, soap and cosmetics.

“We are going to focus on exports to China. Also, remember that we already export cassava products to China as well as leather, hides and skin to China amongst others.

“So this deal will open further the export market to China. Also, I want Nigerians to know that the items that will come in are not necessarily finished goods, so the issue of Nigeria becoming a dumping ground for China does not arise.

“This is because the 41 items that had initially been banned from the Nigerian foreign exchange market will still not qualify under the deal.

“The exchange of currencies between the Nigerian Central Bank and the Chinese Central Bank will make it easier for our entrepreneurs to have direct access to foreign exchange in Renminbi.

“Before now, when importing necessary machinery or merchandise from China, you first exchange Naira for the dollar before changing it again to Renminbi and this puts pressure on the Naira.

“Now what it means is that a large portion of the demand for dollars in Nigeria has been lifted off the back of the Naira and put directly on the Chinese Renminbi.

“And so it is a positive development as it will enhance the value of the Naira and reduce our dependence on the dollar for imports.”

The CBN spokesman said the two central banks are still working on the exchange rates between the Naira and Renminbi.

According to him, Nigerian entrepreneurs will be able to access Renminbi through money deposit banks, using similar rules for the dollar but a clearing bank would be appointed for the transaction.

He said one of requirements for the appointment was that the bank must have a branch in China, which some Nigerian banks already have.

“Chinese investors are interested in setting up shop here. And that is because if they produce here, it will be better for them.

“The cost of transportation, shipping, and all that, will be eliminated. We have a good environment, so a good number of them are interested in setting up production lines here.

“Also, when they do that, they are not going to employ only Chinese workers. A greater portion of the job opportunities in these plants will be filled up by Nigerians. So for us, it’s a good deal.”

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Exchange Rates

November 16, 2018USDGBPEUR
INTERBANK306397354
LAGOS359475418
KANO359476420
PH360476420
ABUJA359478419
NOTE: The black market rates represent the most prevalent. They could be slightly higher or lower among different sellers.
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