It was with joy that many Nigerians received the news from CBN yesterday that the 43 items previously banned from accessing forex have been lifted. What do you expect, Nigerians are suffering and to couple it, we are so emotional in this country. But the question is, what are the implication of this policy by CBN?

Already there is shortage of forex in the country, many do not know why CBN have scarcity of forex, well, we don't have enough dollar in our reserve because we export few commodity in the international market.

Implication of this policy by CBN:

1. Scarcity of forex: the already scares dollar will be fought for by many importers, making the dollar even more scares, and in economics, scarcity creates value. Now you can say that we are devaluing the naira more.

2. Threat to local production: a country which is having such exchange rate problem should look at ways to improve and increase exports, and also increase local production for local consumption and have less need for exported goods. This will reduce pressure on the dollar directly and also grow our local industries. Forex which should have been provided for manufacturers is now given to importers of finished goods.

3. Risk of imported inflation: It might interest you to know that the current inflation is not only a Nigerian thing, but global, intact, inflation is currently biting hard in US, UK and many advanceddd economies, while we import those commodities, we also import inflation coming with it, added to the inflation in Nigeria.

4. Higher Import duties: most people might think that that bringing in commodities like cement, rice and beef into the country will bring down the prices, many factors will still shoot up price, like higher import duties, clearing fees etc.

In summary, inasmuch as lifting the ban on those 43 items was aimed at reducing hardship, I see it as a trial and error kind of policy since they (CBN) didn't tell us how or what they plan to achieve with it. May God help us all.

Drops pen.

Saintinoo:


4. Higher Import duties: most people might think that that bringing in commodities like cement, rice and beef into the country will bring down the prices, many factors will still shoot up price, like higher import duties, clearing fees etc.

You haven't make your research well concerning this issue.

A kg of rice cost between $0.8-$1.5 per kg in china.

No matter what, a 25kg bag of rice from china will be cheaper than a 25kg rice produce in Nigeria.

If an importer buy a good quality of rice for $0.40 per kg, a 25kg rice will only cost about $11

No factor will make the rice sell more than 25k in Lagos except greediness

Paraman:
You haven't make your research well concerning this issue.

A kg of rice cost between $0.8-$1.5 per kg in china.

No matter what, a 25kg bag of rice from china will be cheaper than a 25kg rice produce in Nigeria.

If an importer buy a good quality of rice for $0.40 per kg, a 25kg rice will only cost about $11

No factor will make the rice sell more than 25k in Lagos except greediness

Have you ever thought about job losses? If these rice mill in Nigeria closes the resultant effects will much

I think the major reason for lifting the ban is to close the gap between the parallel market and the official market for exchange rate. These products were still being imported but the importers sourced funds from the parallel market. The CBN wants to bring them to the official window so as to reduce patronage of the black market.

Paraman:
You haven't make your research well concerning this issue.

A kg of rice cost between $0.8-$1.5 per kg in china.

No matter what, a 25kg bag of rice from china will be cheaper than a 25kg rice produce in Nigeria.

If an importer buy a good quality of rice for $0.40 per kg, a 25kg rice will only cost about $11

No factor will make the rice sell more than 25k in Lagos except greediness

Do you know how much a Toyota car is sold in Japan? Or ford in US? You see it as greediness because you don't understand how these things work, government policies make these good expensive with other resulting effects I just mentioned above.

Import duties, imported inflation, other taxes, shipping cost. Go to any Igbo man shop at Alabama market and ask, they buy these goods at a very cheap rate in China, but will spend more than 250 percentage of the cost of that goods just to Bing it to their warehouse.

Saintinoo:


Do you know how much a Toyota car is sold in Japan? Or ford in US? You see it as greediness because you don't understand how these things work, government policies make these good expensive with other resulting effects I just mentioned above.

Import duties, imported inflation, other taxes, shipping cost. Go to any Igbo man shop at Alabama market and ask, they buy these goods at a very cheap rate in China, but will spend more than 250 percentage of the cost of that goods just to Bing it to their warehouse.

We are talking about rice here, not car or car part.

We shall see who's wrong in few days time

ozolity:
I think the major reason for lifting the ban is to close the gap between the parallel market and the official market for exchange rate. These products were still being imported but the importers sourced funds from the parallel market. The CBN wants to bring them to the official window so as to reduce patronage of the black market.

Sure, they were still bring imported, so CBN wants to discourage patronage of the black market by lifting these ban.

Solsix:

Have you ever thought about job losses? If these rice mill in Nigeria closes the resultant effects will much

Rice farmers have make lots of money in the last 8 years, let them compete with importers and is not as if the FG won't still be supporting them. The FG have lots of plans for them.

It is in Tiefnubu's interest that the naira deteriorates as the dollar moves up.

Most of his assets are in Dollars.

Paraman:
You haven't make your research well concerning this issue.

A kg of rice cost between $0.8-$1.5 per kg in china.

No matter what, a 25kg bag of rice from china will be cheaper than a 25kg rice produce in Nigeria.

If an importer buy a good quality of rice for $0.40 per kg, a 25kg rice will only cost about $11

No factor will make the rice sell more than 25k in Lagos except greediness

China is actually a net importer of rice

Paraman:
We are talking about rice he z1 ubre, not car or car part.

We shall see who's wrong in few days time

This is the emotional part I was talking about, mind you, rice is still imported even during the ban, just that importers sourced forex from black market. Now that CBN wants to discourage them from sourcing from black market, what do you think will happen to the already scares forex?

Kukutente23:

China is actually a net importer of rice

Rice also cost within that range in Thailand and India

Paraman:
Rice also cost within that range in Thailand and India

Yes. And same with Nigeria

Paraman:
Rice farmers have make lots of money in the last 8 years, let them compete with importers and is not as if the FG won't still be supporting them. The FG have lots of plans for them.

They can’t compete, this is globalization in play.
First China Farmer are advanced in rice production compared to Nigerian farmers.
Secondly they are taking advantage of mass production as a result of cheap labor.
How can they compete with market force where our local farmers cost of production can’t compete with retail price of imported rice. Automatically they will get frustrated and abandoned the business join them in importing it.
Leading to unemployment for the employees in the rice ecosystem.
Importation is a short term solution to a long time problem.

Kukutente23:

Yes. And same with Nigeria

A 25kg rice currently cost more than 40k in Nigeria.

Paraman:
A 25kg rice currently cost more than 40k in Nigeria.

See how you are throwing fake data up down.

Saintinoo:


See how you are throwing fake data up down.

Share the real data with me

@OP I get your drift and sincerely, I feel that policy will have serious negative effects on the economy.

On your no 2 point, we saw it coming when local manufacturers turned themselves to tin gods with power to do and undo... In those days, we had affordable and quality imported cement, less cases of building collapse till when so called local manufacturers entered the picture and started doing nonsense in the cement sector.

If you check deeper, the forex restriction was lifted not levy on imports.. so the local manufactirers will still make sales but won't be able to hold Nigerians spell bound any longer.

ozolity:
I think the major reason for lifting the ban is to close the gap between the parallel market and the official market for exchange rate. These products were still being imported but the importers sourced funds from the parallel market. The CBN wants to bring them to the official window so as to reduce patronage of the black market.

More like it.. You're really smart.

Paraman:
A 25kg rice currently cost more than 40k in Nigeria.

That's less than our equal to $1

Kukutente23:

That's less than our equal to $1

A 25kg of rice cost more than 40k, Importing rice from Asia is cheaper.

Paraman:
A 25kg of rice cost more than 40k, Importing rice from Asia is cheaper.

How? Check your calculations and exchange rate
The damage your APC has done is deep
And i hope you realise what is called a bag of rice is actually 50kg not 25kg. So check your calculations again

Paraman:
You haven't make your research well concerning this issue.

A kg of rice cost between $0.8-$1.5 per kg in china.

No matter what, a 25kg bag of rice from china will be cheaper than a 25kg rice produce in Nigeria.

If an importer buy a good quality of rice for $0.40 per kg, a 25kg rice will only cost about $11

No factor will make the rice sell more than 25k in Lagos except greediness

Sir it doesn't work like that.

There are import duties on rice in nigeria.

Even if it cost 11 dollars for 25kg of rice. Dont forget importers will have to source expensive dollars in the black market

Import duties and corruption plus rice union price will make imported rice more expensive

motymop:


Sir it doesn't work like that.

There are import duties on rice in nigeria.

Even if it cost 11 dollars for 25kg of rice. Dont forget importers will have to source expensive dollars in the black market

Import duties and corruption plus rice union price will make imported rice more expensive

Importers can now get dollars at the CBN rate.

If I calculate it base on CBN rate, a 25kg rice will only cost pata pata 9-10k

How much is the import duty and other expenses? The rice will still be cheaper than a 25kg rice from northern Nigeria.

Kukutente23:

How? Check your calculations and exchange rate
The damage your APC has done is deep
And i hope you realise what is called a bag of rice is actually 50kg not 25kg. So check your calculations again

At $0.20/kg, a 50kg rice will only cost about $10 per bag

It will still be cheaper than rice from northern Nigeria.

By november when imported rice flood the market, you will see how prices will fall.

Paraman:
At $0.20/kg, a 50kg rice will only cost about $10 per bag

It will still be cheaper than rice from northern Nigeria.

By november when imported rice flood the market, you will see how prices will fall.

Which country are you getting 0.2/kg from? You're beginning to manufacture data
Prices will not fall in November. Our forex is a mess. You're looking at pre-2015 when we had a healthy forex. Right now $1=N1000
The only saving grace is if imported rice becomes duty free or smuggling of rice becomes attractive. As far as official line is concerned, there's no way you're going to get rice cheaper than it is.
The best you can hope for is stability of the price.

Kukutente23:

Which country are you getting 0.2/kg from?

I said $0.20/kg not $0.2/kg as you claim. Importers can get it as low as $0.10-$0.15/kg from some Asian countries sef


If the importers buy dollar from the CBN, they will buy at about #770/$

So make the calculations yourself.

Kukutente23:

Which country are you getting 0.2/kg from? You're beginning to manufacture data
Prices will not fall in November. Our forex is a mess. You're looking at pre-2015 when we had a healthy forex. Right now $1=N1000
The only saving grace is if imported rice becomes duty free or smuggling of rice becomes attractive. As far as official line is concerned, there's no way you're going to get rice cheaper than it is.
The best you can hope for is stability of the price.

Imported rice will be cheaper than rice from the northern part, you will see in few days time.

Paraman:
I said $0.20/kg not $0.2/kg as you claim. Importers can get it as low as $0.10-$0.15/kg from some Asian countries sef


If the importers buy dollar from the CBN, they will buy at about #770/$

So make the calculations yourself.

Which country is that?
What is the difference between 0.2 and 0.20

Paraman:
Imported rice will be cheaper than rice from the northern part, you will see in few days time.

Dey play
The market indices do not support your claim
Just don't abandon this moniker for another in a few days

Kukutente23:

Which country is that?
What is the difference between 0.2 and 0.20

$0.2 is not the same thing as $0.20

Importers can even buy rice from Asia for less than $0.20/kg

Kukutente23:

Dey play
The market indices do not support your claim
Just don't abandon this moniker for another in a few days

Why will I do so?

I will quote you in november when price fall