The foreign exchange restrictions placed on 43 items by the Central Bank of Nigeria (CBN) on Tuesday drew criticism from the International Monetary Fund (IMF).
The policy is holding back Foreign Direct Investments (FDIs) into the local economy, IMF’s Divisional Chief, Research Department, Oya Celasun, told a news conference on the World Economic Outlook at the World Bank/IMF Annual Meetings in Washington D.C.
Besides, the IMF chief said Nigeria requires a tight monetary policy and the unification of its exchange rates to achieve the desired growth.
His position contradicted that of CBN Governor Godwin Emefiele who had always insisted that the apex bank acted in the best interest of the local economy.
He said the decision to restrict forex access and shut the official foreign exchange window for the importation of the banned 43 items would protect Nigeria’s foreign reserves, as well as the nation’s economy.
According to him, the policy was introduced to stimulate the domestic economy and enhance domestic production and protect local industries from undue foreign competition and take-over.
But Celasun said the policy was working to the contrary, pointing out that Nigeria’s growth has been weak, even as he gave hope that growth would pick up next year with support from the agricultural sector, which will enable the country to spend more on priorities, such as social safety and infrastructure.
He said: “There is need for the strengthening of the banking system and unified exchange rate system. Foreign exchange restrictions have also been distorting the public and private sector decisions and holding back investment. Therefore, strengthening the banking sector resilience and continued stronger structural reforms, especially in infrastructure, power sector and broader governance, are critical.”