The Central Bank of Nigeria, CBN, is now to allocate foreign exchange
to end-users, with priority given to matured Letters of Credit,
importation of petroleum products, raw materials and machinery. This is
in a bid to effectively manage the nation’s depleted foreign reserves.
This came as Nigeria’s foreign trade report for imports and exports
during the third quarter of 2015 has shown an unprecedented decline
reflecting the level of stress the economy has witnessed since this
year.
The Director of Monetary Policy of the CBN, Mr. Moses Tule, who spoke
in Abuja, at the weekend said under the new regime, those who take
pleasure in wasting the nation’s foreign exchange in shopping abroad
would find it increasingly difficult.
His words: “Our priority as a nation for the allocation or use of
foreign exchange is for the settlement of matured Letters of Credit,
LCs, that have been opened for importation; for the importation of
petroleum products until such a time when we have our refineries fully
operational and we are not in a position to import fuel again to ensure
that the wheels of economic development continue turning and running
and for the importation of raw materials.
“By the time we meet these three priority areas, you will discover
that people who are using their debit cards overseas for shopping can
never be on the priority list.
“We do understand that it may not be all that the demands will be for
shopping. We have seen that the reserves are not there and what we
have we will use essentially for the purposes that will keep the wheels
of the economy running. We have to produce for export, we can’t continue
to depend only on the export of crude oil.”
The director said that the CBN synpathised with Nigerians on the ban
of the use of debit cards abroad but that there was nothing the
institution could do on its own to change the nation’s foreign exchange
earnings, as it largely depends on oil receipts.
“It is a healthy development where Nigerians can no longer use debit
cards abroad. But it is inconvenient. Right now the country is going
through very difficult times because of developments in the oil market.
Foreign exchange under the condition Nigeria has found itself has become
a seasonal commodity. Seasonal in the sense that it depends on the
movement of the price of oil. If oil prices are high, then we build
reserves, if oil prices are low, then we have no reserves and we will
be in a crisis situation.
“Does the CBN sympathize with the situation Nigerians find themselves
not being able to use their debit cards outside the country? Yes the
CBN certainly does sympathize with the hardship Nigerians are facing,
but can the CBN stop it? The CBN cannot stop what the banks are doing
now and the reason is very obvious,” he said.
Mr. Tule indicated that the policy would not be reviewed any time in
the short term, as according to him, the reserves which currently stand
at about $29 billion would have to be built up to a figure of around $50
billion before free use of the foreign exchange could be restored.
The moment we begin to build reserves, we expect that just as this
restrictions were not there, most of the restrictions will be lifted but
for now, every hand needs to be on deck. We need to earn foreign
exchange as a country. You can improve your business processes in order
to export and earn foreign exchange and that is what the country is
calling on patriotic Nigerian businessmen to do.”
Economic downturn: Foreign trade drops by N2.5 trillion
Meanwhile, Nigeria’s foreign trade report for imports and exports
during the third quarter of 2015 has shown an unprecedented decline
reflecting the level of stress the economy has witnessed since this
year.
A huge drop in crude oil export appeared to have taken a toll on the
ability of the economy to finance imports as the Central Bank of
Nigeria, CBN, tightenned its restrictions of foreign exchange
utilisation within the period.
According to the foreign trade statistics released by National Bureau
of Statistics, NBS, compared to the corresponding quarter of 2014, the
value of total merchandise trade comprising Nigeria’s imports and
exports in third quarter 2015 decreased by N2.5 trillion or 38.3 per
cent. Total value of trade in the third quarter of 2015 was N4.02
trillion as against N6.4 trillion in the corresponding period of last
year.
This, according to the report, was as a result of a N132.4 billion or
7.3 per cent and N 2.4 trillion or 50.3 per cent decline in imports and
exports respectively relative to the corresponding quarter in 2014.
The third quarter 2015 reports also show steady decline in the
economy sector as the value dropped by N338 billion against the
preceeding quarter of 2015.
Quarter-on-quarter, the sharp decline in exports and slight decrease
in imports contributed to continued fall in the Country’s trade balance,
by 32 per cent or N 303.1 billion during the third quarter of 2015.
Total value of Nigeria’s imports during the quarter stood at N1.7
trillion, a slight decrease of one per cent from what was recorded in
the preceding quarter, but, year-on-year analysis showed that the
country’s imports decreased significantly by N132.4 billion or 7.3 per
cent, reflecting the siginificant difference in the economic conditions
between the periods.
Total value of the nation’s exports totalled N 2.3 trillion in the
third quarter of 2015, a decrease of N320.6billion or 12.1 per cent,
over the value N2.65 trillion recorded in the preceding quarter.
This decline, according to NBS, was attributed to a fall in crude oil
exports by N372.8 billion or 18.8 per cent over the preceding quarter.
The structure of Nigeria’s imports by section was dominated by the
imports of “Boilers, machinery and appliances; parts thereof” which
accounted for 24 per cent of the total value of imports in the third
quarter of 2015.
Other commodities which contributed noticeably to the value of
imports in the review period were “Mineral products” at 15.3 per cent,
“Vehicles, aircraft and parts thereof; vessels etc” at 8.8 per cent,
“Products of the chemical and allied industries” at 8.6 per cent, and
“Base metals and articles of base metals” at 8.4 per cent.
Imports classified by Broad Economic Category, revealed that
Industrial Supplies “ranked first with N470.3billion or 27.9 per cent of
total imports. This was followed by “Capital Goods and parts” with the
value of N398.7 billion or 23.6 per cent, and “Food and Beverage” with
N322.8billion or 19.1 per cent. The value of Motor Spirit (petroleum
products) stood at N220.6 billion.
Nigeria’s imports by direction (country of origin), showed that the
country imported goods mostly from China, United States, Belgium,
Netherlands and India which respectively accounted for N459.4 billion or
27.2 per cent, N160.6 billion or 9.5 per cent, N128.3billion or 7.6 per
cent, N101.8billion or 6 per cent and N97.4billion or 5.8 per cent of
the total value of goods imported during the quarter.
Further analysis of Nigeria’s imports by continent, revealed that the
country consumed goods largely from Asia with imports valued at N764.5
billion or 45.3 per cent of total imports while it imported goods valued
at N596.4 billion or 35.3 per cent from Europe and N241.3 billion or
14.3 per cent from the Americas.
Import trade from Africa stood at N65.4 billion or 3.9 per cent while
imports from the region of ECOWAS amounted to N16.3 billion.
The structure of exports is still dominated by crude oil, which
contributed N.6 trillion or 69.1 per cent to the value of total domestic
exports in the third quarter of 2015. Natural liquefied gas recorded
N265.2 billion of the total export value during the period under review.
Exports by section revealed that Nigeria exported mainly “Mineral
Products”, which accounted for N2.025 trillion or 86.8 per cent of the
total exports.
Other products exported by Nigeria include those catigorised as
“vehicles, aircraft and parts thereof; vessels etc.” at N216.2 billion
or 9.3 per cent; “prepared foodstuffs; beverages, spirits and vinegar;
tobacco” at N33.1 billion or 1.4 per cent, and “vegetable products” at
N9.3 billion or 0.4 per cent of total exports.
No comments:
Post a Comment