Business
Restrictions on 43 Items: It’s a Policy Mistakes As It Falls outside CBN’s Mandates- Cardoso
By Ocheneyi Alli
The Central Bank of Nigeria (CBN) has given fresh reasons it removed the restriction on 43 items that can be produced in Nigeria, from accessing foreign exchange, saying it’s trade policy which falls outside its mandates.
Olayemi Cardoso, CBN Governor, said: “It is important to note that trade policy is
primarily the responsibility of the fiscal authorities, and delving into such matters falls outside the purview of the CBN.”
He made the clarification during the Chartered Institute of Bankers of Nigeria (CIBN) 58th Annual Bankers’ Dinner and Grand Finale of the Institute’s 60th Anniversary.
He said: ” Allow me to provide further clarification on the issue of the 43 items.
First, it is important to note that these items were never outrightly banned by the government.
The CBN had imposed restrictions on their access to foreign exchange in the official market.
However, these restrictions resulted in increased demand for foreign exchange in the parallel market, leading to the depreciation of the exchange rate in that segment of the Nigerian Foreign Exchange Market (NFEM) and widening the premium between the parallel and official market.
Studies have shown that during the period when the 43
items were restricted, there was a 51.0% increase in trade evasion by importers accessing the foreign exchange market, resulting in a revenue drop of approximately US$1.4 billion, or US$275 million annually, between 2015 and 2019.
Affects Revenue Tariffs on Goods
Additionally, revenue from tariffs on goods decreased from a high of approximately US$920 million in 2011 to about US$250 million in 2017.
In 2019, the actual tariff on goods stood at US$320 million, but counter factual evidence suggests that as much as US$680 million could have been earned in the same year.
Furthermore, evidence has shown that foreign exchange restrictions had an adverse impact on Nigerian households and contributed to inflationary pressures.
The reduction in trade restrictions and levies on rice,sugar, and wheat by 50.0% had only a minimal impact on welfare, with a 0.8%
improvement, and a mere 0.4% reduction in extreme poverty.
Moreover, the benefits of trade gains for the general population
were negligible, as the average industry in Nigeria pays 13.7% more for its inputs.”
Manufacturers Apprehensive
However, local manufacturers are not happy with the removal of the ban on the 43 items, fearing that it is capable of collapsing many industries very soon.
The Vice Chairman of Basic Metal, Iron and Steel Products sector of the Manufacturers Association of Nigeria (MAN), Mr. Lekan Adewoye, has advised the Federal Government to urgently reverse its decision to remove ban on 43 items on foreign exchange restriction by the Central Bank of Nigeria, (CBN).
Lack of consultation with MAN
Adewoye, totally condemned the new CBN policy , asserting “This directive will further kill the manufacturing industry that is already struggling to survive.
” The problem is about policy somersaults., some of our members who have outrightly invested in backward integration will now start to regret this move because everyone who can assess FOREX will claim to be an importer, forcing sincere manufacturers to
close shop and increasing the numbers of jobless persons.”
He laments further: ” “Lack of consultation, I can speak for manufacturers because we always try our best to engage the government on some critical issues and decisions, but when some of these decisions are being taken, manufacturers are not being consulted.
“Even when the 43 items were put on the restriction list, there was no consultation. It was just at the end of the day, we felt that to a reasonable extent, the decision were in the interest of manufacturers, but there were a couple of items on that list, that some manufacturers use at that time, some of those manufacturers were also affected and government is taking a decision to remove the entire items on that list without proper consultation with the Manufacturers Association of Nigeria, (MAN) to even have an idea of what effect will this have on their businesses.
“I want to assure you that many industries will shutdown very soon and this will lead to lost of jobs and insecurity will be alarming in the country. Nigeria has all it needs to produce Iron Rods and other items on this list, opening up the market will be a disincentive to manufacturers that continue to put their resources and investment into growing the industry.”
Dr. Abubakar Aliyu, an ex Director-General of the Raw Materials Research and Development Council (RMRDC) , amplifies Mr. Adewoye’s concerns and said: About two months ago, CBN woke up and said that 43 items it restricted can now access foreign exchange.
This will greatly affect the MAN members companies .
He encouraged the leadership of MAN and the RMRDC to strongly engage the Federal Government on the issue , because, it will seriously affect the performance of the sector .
Background
CBN, had in a circular in June 2015, published a list of imported goods and services that will not be eligible for foreign exchange in the Nigerian foreign currency market.
The list which was originally 41 was updated to include two more items.
Below were the list of the items:
1. Rice
2. Cement
3. Margarine
4. Palm kernel
5. Palm oil products
6. Vegetable oils
7. Meat and processed meat products
8. Vegetables and processed vegetable products
9. Poultry and processed poultry products
10. Tinned fish in sauce (Geisha)/sardine
11. Cold rolled steel sheets
12. Galvanized steel sheets
13. Roofing sheets
14. Wheelbarrows
15. Head pans
16. Metal boxes and containers
17. Enamelware
18. Steel drums
19. Steel pipes
20. Wire rods (deformed and not deformed)
21. Iron rods
22. Reinforcing bars
23. Wire mesh
24. Steel nails
25. Security and razor fencing and poles
26. Wood particle boards and panels
27. Wood fiberboards and panels
28. Plywood boards and panels
29. Wooden doors
30. Toothpicks
Glass and glassware
32. Kitchen utensils
33. Tableware
34. Tiles-vitrified and ceramic
35. Gas cylinders
36. Woven fabrics
37. Clothes
38. Plastic and rubber products
39. Polypropylene granules
40. Cellophane wrappers and bags
41. Soap and cosmetics
42. Tomatoes/tomato pastes
43. Eurobond/foreign currency bond/ share purchases.
Business
NTA didn’t introduce VAT on charges collected by banks — NRS
The Nigeria Revenue Service (NRS) wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax (VAT) has been newly introduced on banking services, fees, commissions, or electronic money transfers.
Photo: NRS chairman, Zacch Adedeji
The Nigeria Revenue Service (NRS) has clarified that the Nigeria Tax Act (NTA) did not introduce VAT on banking charges, nor did it impose any new tax obligation on customers in this regard.
In a statement made available to newsmen and signed by Dare Adekanmbi, Special Adviser on Media to the NRS chairman, Zacch Adedeji, the service said the claims are incorrect.
According to the NRS, VAT has always applied to banking services and was not introduced by the Nigeria Tax Act.
The statement reads:
“The Nigeria Revenue Service (NRS) wishes to address and correct misleading narratives circulating in sections of the media suggesting that Value Added Tax (VAT) has been newly introduced on banking services, fees, commissions, or electronic money transfers.
This claim is categorically incorrect.
“VAT has always applied to fees, commissions, and charges for services rendered by banks and other financial institutions under Nigeria’s long-established VAT regime.”
Business
LIRS gives employers Jan 31 deadline for filing 2025 tax returns
The Executive Chairman of LIRS, Dr Ayodele Subair, who gave the directive on Thursday, reminded employers that the obligation to file annual returns is in line with the provisions of the Nigeria Tax Administration Act 2025.
The Lagos State Internal Revenue Service(LIRS) fixed statutory deadline of January 31, 2026, for all employers of labour in the state to file their annual tax returns for the 2025 financial year.
The Executive Chairman of LIRS, Dr Ayodele Subair, who gave the directive on Thursday, reminded employers that the obligation to file annual returns is in line with the provisions of the Nigeria Tax Administration Act 2025.
Subair explained that employers are required to file detailed returns on emoluments and compensation paid to their employees, as well as payments made to service providers, vendors, and consultants, and to ensure that all applicable taxes due for the 2025 year are fully remitted.
He emphasised that the filing of annual returns is a mandatory legal obligation and warned that failure to comply would attract statutory sanctions, including administrative penalties, as prescribed under the new tax law.
Business
Nigeria To Review Inflation Reporting First Time In 15 years
The agency said the expected spike in December inflation did not reflect actual price movements in the economy but was largely a statistical distortion caused by the rebasing of the Consumer Price Index.
Nigeria’s National Bureau of Statistics (NBS) has announced plans to revise its inflation reporting methodology.
This followed concerns that December’s year-on-year figure may be artificially inflated due to the impact of last year’s rebasing exercise.
The agency said the expected spike in December inflation did not reflect actual price movements in the economy but was largely a statistical distortion caused by the rebasing of the Consumer Price Index.
Reuters reported that the rebasing, the first in 15 years, adopted December 2024 as the index reference point.
Officials explained that the change is likely to exaggerate the year-on-year inflation figure for December without accurately capturing prevailing market trends.
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