By Our Correspondent
Prof. Uche Uwaleke, the first professor of Capital Market in Nigeria, has commended the Central Bank of Nigeria’s (CBN) decision to lift ban on 43 items placed on Forex prohibition list.
In his reaction, he said that the immediate impact of the readmission of the 43 items to the forex market will help to reduce the premium between the official and the parallel market.
He added that the exclusion was in conflict with extant trade policy as the items were not under import prohibition in the first place, saying that the act was example of lack of policy coordination under the previous administration.
The new policy according to him will improve transparency and disclosures in foreign exchange transactions.
Professor Uche Uwaleke, however, warned that the move will have negative implications for import substitution and local manufacturing efforts.
“We need to worry about the risk of import surge and upscale the use of fiscal policy measures to boost domestic production and productivity”
In his response to the CBN policy, the Director General, Centre for the Promotion of Public Enterprises (CPPE), Dr. Muda Yusuf, he described the move as a welcome development and as a part of the normalisation process, as the exclusion of the items became the foundation of the distortions in the foreign exchange market.
Dr. Muda Yusuf also held the same view and position on unnecessary decision of previous administration to place the items on Forex prohibition list as the act is in conflict with the extant trade policy.
He also agreed with the position of Professor Uche Uwaleke that the measure will not only promote transparency, but also disclosures I foreign exchange transactions.
He however, cautioned that the CBN should avoid market suppression tendencies, especially outside the Investors and Exporters window.
He advised that the fiscal authorities should continually monitor the economic landscape to shape the character of fiscal policy measures, in order to regulate imports in line with comparative advantages principles.
Dr. Muda Yusuf stated that all policy impediments to forex inflows should be removed.