Monday, May 17African Business News
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Tag: iMPORT

Preserving forex reserves, raising local capacity through import substitution

Preserving forex reserves, raising local capacity through import substitution

Finance
For decades, successive governments in Nigerian resorted to protective measures, including import restrictions and exchange rate control, to manage its foreign exchange (forex) market, and deal with the problems of import and oil dependency. This import substitution policy is usually heralded by an economic crisis, often triggered by the collapse of the oil market, and a significant drop in Nigeria’s oil revenues, which account for 70% of the country’s total revenues. Expectedly, the Central Bank of Nigeria (CBN), followed this well-trodden path in efforts to ensure that Nigeria embraces import substitution and reduces the demand pressure on foreign exchange by importers, and ultimately conserves the nation’s hard-earned reserves. For instance, in June 2015, it ban...