The Lagos Chamber of Commerce and Industry, LCCI, has advised the Central Bank of Nigeria to relax its foreign exchange policies to stimulate economic growth.
In a statement issued on Sunday in Lagos, the LCCI's Director-General, Muda Yusuf, said that normalisation of the foreign exchange market was crucial to stemming the current economic downturn.
Mr. Yusuf urged the apex bank to review its foreign exchange policies during its upcoming Monetary Policy Committee, MPC, meeting scheduled for January 25 and 26.
He said that to deepen the market, foreign exchange from Diaspora remittances, export proceeds, foreign investors, multinational companies and non-governmental organizations, should be allowed to trade freely in the autonomous market.
According to him, a World Bank report puts Nigeria's Diaspora remittance at $21 billion in 2014. He, therefore, urged the CBN to articulate policies that would stimulate and unlock the huge potential in Diaspora remittances and other capital inflows into the economy.
The DG said the adoption of the model would have a significant moderating effect on the exchange rate. He also urged the apex bank to review the 41 items prohibited from accessing foreign exchange from the official market.
"Any product that is not on the official import prohibition list of the Federal Government should have access to the autonomous foreign exchange market.
"Import prohibition is a vital trade policy matter which should be undertaken in an integrated manner with inputs from the Ministries of Finance; Budget and National Planning; Trade and Investment and the Nigeria Customs Service.
"The consequences of import prohibition are far reaching and go beyond the narrow perspective of conservation of foreign exchange.
"The dimensions of inter-sector linkages, employment implications, customs revenue implications, breaches of regional and other international trade treaties should be taken into account," Mr. Yusuf said.
He said that fiscal policy measures like taxation and import tariffs should be used to shape the behaviour of economic operators without a disruption in the economy.
According to him, the restrictive foreign exchange policies impacted negatively across all levels of investments resulting in factory closures, job losses, escalating prices, waning GDP growth and weakening investors' confidence.
He stressed that a foreign exchange market characterised by transparency, liquidity and stability was imperative to rebuilding economic growth momentum, boosting investors' confidence, encouraging foreign exchange inflows, and job creation.