The restriction is part of the government’s efforts to reduce reliance on importation. The Nigerian apex bank has under the President Muhammadu Buhari administration regularly announced similar restrictions for dozens of items.
The implementation of the policy, according to the Central Bank of Nigeria (CBN), is to help conserve foreign exchange and encourage local production. These restrictions have essentially limited importation of the items or ballooned their retail prices, as it costs importers more when they use alternative channels to access foreign exchange.
“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 CBN announced on Friday, April 16, 2021.
The announcement was made just a day after CBN governor, Godwin Emefiele, hinted that the restriction was being considered especially due to local investments in sugar. During a visit to the proposed $500 million Dangote sugar processing plant in Nasarawa State on Thursday, April 15, he said the restriction is part of the government’s efforts to reduce reliance on importation. “We spend $600m to $1 billion importing sugar into the country annually,” he said.
The government’s FX restriction list has been criticised on numerous occasions as harmful to the market and on consumers’ pockets, especially as local production is not doing enough to meet demands.
The prices of sugar and wheat are now expected to blow up with the latest restriction, announced a day after the National Bureau of Statistics (NBS) revealed that food inflation rose to 22.95% (year-on-year) in March, the highest in over 12 years.