With the forex ban, importers will have to source their dollars outside the official window at a higher cost to import; this translates to higher cost of production which will be transferred to the consumers.
Experts say the policy would worsen the country’s food insecurity and add more items to the list of things priced out of the reach of millions of Nigerians while accelerating Nigeria’s food inflation rate currently at 13.35 %.
The country imports wheat, rice, tomatoes, mangoes, fish and pineapples among others to meet up with the short fall. The forex restriction for importers of some of these food items has fuelled smuggling across the country’s porous borders.
Since the ban on rice imports, the country is still struggling to stabilize local production as the policy has enriched Benin Republic. Foreign variety of rice has continued to gain access into the Nigerian market through smuggling at a higher cost for consumers despite the ban, forcing many small businesses to close shop.
Muda Yusuf, director general, Lagos Chamber of Commerce said “We need to worry about the implications of policy pronouncements for investors’ confidence and the general sentiments of investors. “If policy and regulatory risks continue to escalate as we are currently experiencing, the chances of stimulating investment, whether domestic or foreign, would remain dim”.
He added that the current forex policy conceptualization and management are adversely impacting investment in the country.
BusinesDay, 28 August, 2019
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