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

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.”