Monday, January 18, 2016 06:35 AM / TheAnalyst
The drop in oil price at the international market has no doubt put the Nigerian foreign exchange market under pressure forcing the Central Bank of Nigeria (CBN) to take actions to protect the foreign reserves and ensure stability of exchange rate.
In June 2015, the CBN announced a ban on 41 Items classified as ‘Not Valid for Forex’ in order to ensure efficient utilization of foreign exchange and derive optimum benefits from goods and services imported into the country.
This action affected the manufacturing sector as it brought about inability to manufacture due to lack of forex to import raw materials and inability of manufacturers to settle foreign creditors on account of items imported before the CBN policy was announced.
Prior to CBN’s action in June 2015, the sector has been accessing FX market and it utilized about US$7.478bn between January 2013 and May 2015. Other manufactured products enjoyed the highest FX utilization of about 4.25% while electrical and electronics & metals and metal products both followed with 1.62% and 1.59% FX utilization respectively.