The World Bank has advised the federal government to remove import restrictions on food and fertiliser imports and adopt a common ECOWAS external tariff.
The global lender disclosed this in the latest edition of the Nigeria Development Update (NDU) where it lauded the reforms of the last one year in the energy and foreign exchange sector.
According to the bank, Nigeria should follow up its fiscal initiatives such as removal of FX ban on 43 items and single window trade portal with removal of ban on food and fertiliser imports and other trade restrictions.
Furthermore, the bank noted that in the long term,, Nigeria should prioritize enhancing tariff transparency, minimizing non-tariff barriers, and streamlining trade facilitation through improved risk management and auditing processes.
The report reads, "The removal of the FX ban on 43 product lines, the temporary removal of tariffs on food products, and the re-launch of the single window are positive initial steps. Alongside the implementation of these measures, further actions should remove import bans on food and cleaning products, apparel, and fertilizers, as well as and align tariffs with the ECOWAS Common External Tariffs (CET)."
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The World Bank noted that the CBN should continue efforts to deepen the official FX market by facilitating formal remittance inflows, allowing international oil companies to channel their FX sales entirely through the official market, restoring intermediated market access to bureaux de change, and avoiding ad-hoc FX auctions.
It added that providing market participants with greater flexibility in FX trading over time would further enhance the depth of the FX market.
What you should know
Nigeria has significant trade restrictions on a number of items imposing tariffs and outright ban as in the case food such as rice, food items and textile products. In the last administration of the Central Bank of Nigeria (CBN), imposed a ban on access to FX for importers of 43 items.
In October, the Central Bank of Nigeria (CBN) lifted the ban on 43 items imposed during the tenure of Godwin Emefiele. This move marks a significant step toward addressing Nigeria's forex crisis, aligning with demands from critics who had urged the CBN under Emefiele to remove the restriction.
The 43 restricted items were denied access to forex from official sources since 2015. However, some of these items remain on the customs ban list, raising uncertainty about whether they will now qualify for forex funding.
The CBN disclosed that Nigeria lost approximately $1.4 billion between 2015 and 2019 due to the forex restrictions on these 43 items during Emefiele's administration
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