Expanding Export Opportunities to Nigeria

Lifting foreign currency exchange restrictions on 43 imported products will boost import activities in Nigeria, thereby facilitating the entry of Vietnamese goods into the market.

Administrator

28 October, 2023

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The Vietnam Trade Office in Nigeria has announced that on October 12, the Central Bank of Nigeria eliminated the foreign exchange restriction policy for 43 imported items. This move aims to assist Nigerian importers in diversifying their foreign currency supply to meet international payment requirements and thereby promote imports from various countries worldwide, including Vietnam, according to the Central Bank of Nigeria. The removal of the foreign exchange restriction policy is expected to have positive impacts on Nigeria’s domestic manufacturing industry as input materials become more affordable, resulting in cheaper retail products for consumers. Additionally, it is expected that this policy will contribute to a unified foreign exchange market and have a positive effect on inflation.

Previously, on June 23, 2015, the Central Bank of Nigeria imposed a policy restricting foreign exchange, which included a list of 41 items ineligible for foreign exchange in the Nigerian market. Over the years, two more products were added to this list, making a total of 43 items prohibited for foreign exchange in the Nigerian foreign exchange market. As per the provisions of Circular TED/FEM/FPC/GN/01/010, Nigerian businesses were prohibited from exchanging foreign currency through official financial/credit channels (licensed commercial banks and credit institutions) for the importation of these 43 items. Consequently, importers had to turn to the parallel market to fulfill their foreign exchange needs. This led to an increase in demand for foreign exchange on the parallel market, resulting in the depreciation of the exchange rate and a rise in prices. Moreover, foreign exchange restrictions had negative implications for inflation, resulting in higher commodity prices.

With the removal of these regulations, the Central Bank of Nigeria aims to promote order and professional conduct in the Nigerian foreign exchange market, ensuring that the exchange rate is determined by market forces and follows the principle of mutual buying and selling between buyers and sellers. Additionally, this policy aims to establish a unified foreign exchange market with flexible and transparent prices, ensuring price stability and enhancing liquidity in the foreign exchange market. Improved liquidity will reduce market uncertainties.