08 Feb 2022: Nigerian central bank plans to amend its foreign-exchange bidding rules to advocate the production of goods that replace imports, in a bid cut dollar demand.

According to the new rule, manufacturers who show a verifiable progress in the import substitution and job creation drive will be prioritized for the availability of dollar.

High demand for the king dollar is putting further stress on the already collapsed foreign-exchange reserves which stands at $39.9 billion on Feb. 3, the lowest in more than four months. Even the sky-high oil prices have been able to give a boost to the reserves since Africa’s largest crude producer is unable to fulfill its OPEC+ quotas due to crude theft and diversion of oil revenues to subsidize gasoline prices for its population. Henceforth the CBN had no choice but to embrace demand management and three devaluations in two years in order to make the exchange rate more reflective of market factors. 

The banking regulator is keen on assisting investors in “greenfield” and “brownfield” projects who want to produce goods currently imported into the country, thereby creating more jobs as well. Governor Godwin Emefiele said in the presentation. “Foreign exchange support will be solely for the importation of spares, plants and equipment needed to increase production capacities of these companies,” he said.