CBN may increase items on forex restriction list to 50

…commits N75bn to $9bn Dangote refinery

The Central Bank of Nigeria may increase the items on the
foreign exchange restriction list from 42 to 50 in order to boost
local production and stimulate the export market.

The Governor, Central Bank of Nigeria, Mr Godwin Emefiele, said
this on Saturday during an inspection of the refinery being built
by Dangote Group at the Lekki Free Trade Zone in Lagos.

Emefiele said the CBN would get more aggressive in ensuring that
more items being imported into the country were added to the forex
restriction list.

Describing the Dangote refinery as a transformational project
for Nigeria, the CBN governor said the project keyed into the
objectives of President Muhammadu Buhari’s administration which
include conserving forex and diversifying the economy.

He said, “To put it in proper perspective, by the time you
dimension the size of the foreign exchange we use in importing
petroleum products into the country, it is at least one third of
the foreign exchange the CBN spends to import items into Nigeria
today.

“By the time we add also the 42 items that we have, which
certainly we are going to increase from 42 may be to 50 or more in
due course because we are going to get more aggressive in ensuring
that more and more food items that are being imported into this
country are added into the FX restriction list.

“I am saying that by the time we add the savings from the
production and export of petroleum products; by the time we also
add the foreign exchange that we spend on food items, close to 55
or 60 per cent of what the CBN or what the government spends in
funding its foreign exchange operations will be saved in the
country.”

The CBN had in recent years placed restriction on access to
forex for 41 items in order support the production of goods that
can be produced locally such as rice, tomatoes, and palm oil for
domestic and the export market.

But in December 2018, the CBN included fertiliser, thereby
increasing the items on the forex restriction list to 42.

The items include cement, margarine, meat and processed meat
products, private airplanes/jets, roofing sheets, wooden doors,
toothpicks, textiles, soap and cosmetics.

Emefiele also said that the CBN had supported the Dangote
refinery project with N75bn.

He stated, “This (Dangote refinery) is a $9bn project that is
being funded not only by Nigerian banks but also by foreign
banks.

“The Central Bank of Nigeria itself is contributing close to
about N75bn in supporting this project. N75bn is just a drop
compared to about $9bn that this project costs.

“By the time this refinery is completed, it will not only
service the needs of our domestic economy but shore up our
international oil investments.”

Commending Dangote for his resilience and dedication to create
wealth, Emefiele urged other private refinery licensees to develop
capacity to build more refineries.

He said, “I have not seen any licensee approach the bank for
credit to build refinery.

“Remember, such licensee will approach his bank, which will in
turn assess his capacity to build such a refinery and such a
request will be forwarded to the CBN for approval.

“If they have the capacity, we will support them through their
banks.”

The President of Dangote Group, Aliko Dangote, in his remarks,
said the refinery would commence operations in April 2020.

He said, “The projects will make Nigeria to become the largest
exporter of fertilisers in Africa, largest exporter of
petrochemicals and biggest exporter of refined petroleum products
in Africa. Our gas pipeline project will transport three billion
standard cubic feet per day of gas.”

Dangote said the refinery would reduce the importation of
petroleum products and save the country of capital flight.

“The refinery is going to save a huge amount of foreign exchange
outflow because, today, forex is being used in the importation of
petroleum products and our foreign reserves are being heavily
depleted.”