Restriction of 41 banned items must be sustained –Economist

As part of its efforts to boost domestic production and conserve scarce foreign exchange in the country, a finance and industry expert has said that the restricted 41 items must be sustained so as to ensure economic growth.

Speaking at the 23rd edition of the seminar for Finance Correspondent & Business Editors, organized by the Central Bank of Nigeria (CBN), in a paper titled: ‘Enhancing Domestic Production as a Panacea For Growth and Foreign Exchange Conservation’, Dr. Uche Uwaleke said the current demand side management involving forex access restrictions on items which can be produced locally should be sustained.

He, however, urged the CBN to identify specific import goods which can be produced locally and provide incentives for small and medium scale enterprises to begin and or increase the production of such goods.

According to him, the CBN should continue to ensure that inflation remains within manageable limits.

“The bank should pay more attention to Agriculture in its intervention programmes since its remains the largest employer of labour in Nigeria, adding that a significant percentage of the current demand for forex go directly to importing agricultural produce.

While speaking on the recently raised $1 billion Eurobond by the federal government of Nigeria, Dr. Uwaleke noted that the 7.8 percent returns was very high, relative to other bonds currently on the international bond market.

He said that returns on other Eurobond at the international bond market are between five to six percent, while Nigeria’s yield stood at 7.8 percent which simply means that ours is cheaper than others.

“There is no issue in borrowing but the cost of the issuance is the issue, for instance, China has the highest reserves, with a total amount of $2.99 trillion aside from the nation’s sovereign wealth fund but still went to the bond market , in order to build its reserves which serves as buffer”, he explained.

While commenting on the prioritizing food security in the country, such as achieving tomato paste self-sufficiency by year 2016, as well as self-sufficiency in rice by 2018 and wheat by 2019.

He, therefore, emphasized the need for strong policy coordination between the key aspects of economic between the key aspects of economic policy.

“This include fiscal, monetary, exchange and trade policies, which must be targeted at protecting farmers, companies and industries with a view to enhancing domestic production, conserving scarce foreign exchange and promoting economic growth and development”, he noted.