“The boundaries of monetary policy need to be properly defined. Exclusion of sectors from the forex market is not a monetary policy issue. It is trade policy matter.”
Mr Muda Yusuf, Director – General Lagos Chamber of Commerce and Industry, LCCI, said yesterday while reacting to the recent pronouncement by the Central Bank of Nigeria [CBN] on the exclusion of all forms of textile materials from the forex market in both official and unofficial windows.
LCCI, in its the position document said “Monetary policy is about managing liquidity [or money supply] to influence the direction of credit, exchange rate, and inflation.
“Trade policy formulation is not within the remit of the CBN. It is an inter-ministerial responsibility involving the Finance, story Budget and Planning, Industry, Trade, and Investment Ministries.
“The fiscal policy document clearly outlines import and export prohibition lists.
The tariff book also defines the various tariff measures applicable across sectors and range of products with relevant HS codes.
“An import adjustment tax is imposed on selected products to protect local industries.
The tariff regime typically has a life span of seven years to ensure stability and consistency.
The private sector would like to see minimum policy shocks as the administration steps into the next level,” he said.
In view of this, LCCI said that as we progress to the next level of the Buhari administration, policy coordination and collaboration among the economic ministries and agencies is imperative.
“There should be collaboration and coordination between the CBN, the Finance Ministry, Budget and Planning and Trade and Investment on trade policy issues, “he said.
“The exclusion of textile materials from foreign exchange has grave implications for businesses in the fashion, tailoring, fashion accessories and garment industry in the country.
“This industry is one of the fastest growing industry and has created amazing opportunities for many young Nigerians to express their creativity and innovation.
The sector is estimated at N5 trillion, creating about 500,000 jobs.
The industry provides significant value addition to fabrics, whether imported or domestically produced.
The policy contemplation of the CBN will put all of these at risk,” said LCCI.
Trading in textiles is also a major economic activity in the country, both in the northern and southern part of the country.
It is a market that responds to changing tastes and fashion trends in the country and beyond. Hundreds of thousands of women and men make a living in the marketing of textiles.
The policymakers cannot afford to ignore this segment of economic players.
The traders are the bridge between the producers and the consumers.
It is therefore very important for policymakers to take into account the full ramifications of the consequences of policies and collateral outcomes.