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Tuesday, March 21, 2023

CBN to Place Sugar, Wheat on FX Restriction List

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The Central Bank of Nigeria is set to place forex restriction on selected commodities including sugar and wheat.

CBN Governor, Godwin Emefiele, stated this on Thursday in Nasarawa State during an inspection tour of the proposed $500m Dangote sugar processing facility.

He said, “We are looking at sugar and wheat. We started a programme on milk about two years ago, eventually, these products will go into our forex restriction list.”

The CBN governor added that the decision of the apex bank to include sugar and wheat on the forex restriction list was because the country spends $600m to $1bn importing sugar annually.

Emefiele noted that Nigerians must work together to produce these items in the country rather than import them.

Before adding the commodities to the FX restriction list, the CBN Governor said they “want to see to what extent we see the traction that is coming from those who are currently importing these items”.

He noted that “we must all work together to produce these goods in Nigeria rather than import them”.

On how much CBN was supporting the project with, he said “we have made up our mind on how much we’ll put in but of course as you heard from Dangote, the project is worth about $500 million. If you convert that to naira, you know how much that is. I know he’s going to commit some equities to it. From there, we will determine what is the shortfall and we will come in through intervention through the banks for whatever loan that is required for this”.

According to Emefiele, “of course, foreign currency will be provided as long as it is for the importation of equipment for the project through the banks, for whatever loans that is required for this as long as it is for importation of equipment and we will gradually begin to restrict foreign exchange to those who want to import sugar until we achieve this result”.

Dangote stated that they have “a very good relationship with the community and stakeholders. This project, as you see it, will produce a lot of jobs and as a matter of fact, we have to bring a lot of people outside of these areas into the project to help in terms of employment. We’re talking about thousands of jobs, direct and indirect jobs, more than 150,000 jobs”.

The sugar processing project he said has a lot of potential. According to him, “we will also do power generation and ethanol from sugar”.

To the state, “if this place is up and running, I do not think there will be a shortage of power in Nasarawa State. We will be having an excess of 90mw of power” Dangote said.

The project he pointed out “is not just for us to make money from the sugar refinery, but to boost the economy.”

Speaking on the implication of the project to the stability of the Naira, Aliko Dangote stated that “Emefiele is not just a Governor of CBN but also a developmental Governor because he is not just looking at the monetary policy, he is also looking at what he can do to support the naira like this sort of initiative.

He has a problem today meeting up with the demands of import. Supporting projects like this, going forward, the naira in your hands will be very strong. We have quite a lot that we’re doing here”.

With regards to the sugar project, Dangote said they are “targeting about half a million tons but right now, we’re talking about 250 million tons and that is worth about N450 billion.”

“You can only create 100 million jobs targeted by the federal government through this kind of project,” he said.

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