The 41 item exclusion list is no news. In June of 2015, in response to the collapse of foreign exchange inflows, thanks to the crude oil price crash, the central bank decided to change tactics in its quest to maintain a “stable” naira. It abandoned the policy of drawing down on the foreign reserves and opted to just ban certain market participants from the official foreign exchange markets. This, it argued, would reduce pressure on the exchange rate. Demand management they called it. In doing this it drafted a now infamous list of 41 items that were banned from buying foreign exchange from the official markets. The list included things like palm oil, rice, toothpicks and eurobonds.
The logic was simple. If foreign exchange is scarce then we have to prioritise what we spend it on. We can’t keep spending scarce foreign exchange importing things that we can produce locally. In the abridged words of the central bank governor; “why do we continue to import when our vast quantities of comparable quality products are being wasted or simply ignored”. I mean, why spend scarce foreign exchange importing palm oil when we have it in the South South. Why import rice when we can grow it locally. The tacit assumption was that if certain items were banned from the foreign exchange market then people would not import them, and we would produce them locally. And it all kind of makes sense, especially if you don’t know much about economics.
Now I’m not writing this to convince you that the policy works or not. I am here to tell you that there is one item missing from that list. There is a 42nd item that, for unknown reasons, was excluded. A product that Nigeria should be known for. A product that we have all the necessary ingredients to produce locally. A product that we really should not be importing but should even be producing a surplus and exporting. That product is premium motor spirit, popularly known as fuel.
Finally, we have the market for fuel. We consumed about 51.5 million litres of fuel per day on average in 2016. We consume so much fuel that it is has been the single largest imported item for decades. In terms of value, we spend 250 percent more foreign exchange importing fuel, not including diesel or kerosene, than we do for all food, including rice, palm oil, wheat and everything else. In fact, I would argue that if we somehow stopped importing fuel today, our foreign exchange crisis would be over, albeit temporarily.
So just to recap, we have the raw materials, the skills, and the market, and if we stopped importing fuel our foreign exchange crisis might be over. If the central bank really believed that banning products from the official markets really led to local production of that product, then why isn’t fuel on the list. Surely fuel should be the 42nd item.
Fortunately, discussing the crude oil industry is a national pastime. We talk about it every other day and we know, beyond the shadow of doubt, the challenges in moving from drilling oil to producing fuel. We know that in reality producing fuel is a lot more complicated than banning fuel imports or banning fuel importers from foreign exchange markets. We know that if we banned fuel importers from buying dollars then all that would happen is the pump price of fuel would go up. We will probably still import it and not produce it locally.
If the central bank really believes that its 41 items exclusion list does anything other than create distortions in the foreign exchange market, then it should ban fuel importers so we know it’s real. Else it should be abandoned for causing more problems than it solves.
Nonso Obikili is an economist currently roaming somewhere between Nigeria and South Africa and tweets @nonso2. The opinions expressed in this article are the author’s and do not reflect the views of his employers.
oral digoxin 250mg order generic lanoxin 250 mg molnupiravir without prescription
order diamox 250 mg for sale buy isosorbide generic order azathioprine for sale
digoxin 250 mg ca order molnunat for sale buy molnunat
order coreg without prescription coreg order online order amitriptyline 10mg generic
order amoxil 500mg pill stromectol oral ivermectin 3mg for sale
buy alendronate 35mg furadantin 100mg brand ibuprofen 400mg generic
order dapoxetine 90mg generic dapoxetine 30mg ca cheap domperidone 10mg
buy generic nortriptyline 25 mg paracetamol 500 mg cheap order generic paroxetine
indocin 75mg without prescription cenforce canada order generic cenforce
pepcid over the counter purchase tacrolimus sale mirtazapine 30mg brand
doxycycline 200mg ca medrol 16mg for sale medrol 16 mg tablet
ropinirole tablet buy labetalol 100 mg generic trandate 100mg sale
buy tadalafil 20mg order trimox purchase trimox
generic tricor 160mg fenofibrate 200mg for sale viagra online order
buy nexium 40mg sale purchase clarithromycin for sale furosemide over the counter
order cialis 5mg online Cialis online ordering buy viagra 100mg pill
cheap minocycline 50mg order terazosin 1mg generic terazosin 1mg drug
order tadalafil 5mg online cialis delivered ed pills cheap
order glycomet 1000mg generic metformin 500mg sale nolvadex canada
order modafinil online cheap promethazine canada promethazine 25mg brand
order clomid 50mg online cheap prednisolone for sale prednisolone 20mg pill
order deltasone 20mg pills purchase amoxicillin without prescription amoxil pill
accutane 40mg price isotretinoin generic ampicillin drug
order fildena 100mg pill order sildenafil propecia 5mg brand
buy ivermectin uk buy stromectol sale oral prednisone 10mg
order zofran 8mg pill buy ondansetron pills generic trimethoprim
isotretinoin drug buy azithromycin 500mg generic azithromycin 500mg usa
order albuterol 4mg generic buy ventolin 4mg online cheap purchase amoxiclav for sale
buy prednisolone for sale order furosemide sale furosemide cheap
buy provigil 100mg pills provigil 100mg pill lopressor 50mg price
buy dutasteride without prescription order cephalexin 125mg without prescription orlistat cost
buy generic imuran 50mg cheap imuran 25mg naproxen online
oxybutynin 5mg without prescription order ditropan online oxcarbazepine online order
omnicef 300mg price purchase protonix order protonix sale
simvastatin 10mg pills sildenafil 200 mg sildalis order
dapsone 100mg for sale order dapsone 100mg online cheap atenolol 100mg pills