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UPDATE 1-Nigeria to halt foreign currency for sugar, wheat imports -central bank

Published 16/04/2021, 11:47

(Adds details, background)
By Camillus Eboh and Chijioke Ohuocha
ABUJA, April 16 (Reuters) - Nigeria will no longer provide
foreign currency for importers of sugar and wheat, the central
bank said on Twitter on Friday, as the country tries to conserve
national dollar reserves.
Africa's most populous country, and its biggest economy,
relies on imports to feed its 200 million people. The central
bank restricted access in 2015 to foreign exchange for 41 items
it says can be produced locally, and has added to the list since
then.
"Sugar and wheat to go into our FX restriction list. We must
work together to produce these items in Nigeria rather than
import them," the central bank said in a tweet.
Currency restrictions aimed at easing pressure on the local
currency amid a shortage of dollars have contributed to
galloping inflation and further weakened the naira in recent
years, analysts say.
The Nigerian currency hit a record intra-day low of 437.62
to the dollar on Friday after the central bank sold hard
currency at a weaker level in the forward market to foreign
investors. Annual inflation hit a more than four-year high in March,
driven largely by food price inflation, which rose 1.16
percentage points from a month before, to 22.95%. The World Trade Organization has voiced concerns about
Nigeria's foreign exchange management and the way the country
has used it to support manufacturing, imports and exports.
In August 2019, the central bank told lenders to stop
offering credit to importers of milk after saying it would ban
access to foreign exchange for dairy purchases to spur local
production. It later lifted forex restrictions for milk imports
for six firms following an outcry from businesses.

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