Economy
Nigeria Lost $1.4bn to FX Ban on 43 Items in Four Years—Cardoso
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, has admitted that the country recorded a revenue drop of $1.4 billion between 2015 and 2019 after imposing foreign exchange (FX) restrictions for import of 43 items over eight years.
The apex bank governor made this known on Friday while delivering his keynote address at the 58th Annual Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
The apex bank head, during the preparation of his monetary policy thrust, cited available data saying, “Studies have shown that during the period when the 43 items were restricted, there was a 51.0 per cent increase in trade evasion by importers accessing the foreign exchange market, resulting in a revenue drop of approximately $1.4 billion or $275 million annually, between 2015 and 2019.”
One of his early moves after his appointment was the restoration of the 43 items prohibited from access to the foreign exchange (FX) window in 2015, under the administration of his predecessor, Mr Godwin Emefiele following the directive of former President Muhammadu Buhari.
The decision came about eight years after the bank on 23 June 2015 restricted those who deal in the items from accessing forex at the authorised FX window.
Speaking on the 43 items on Friday, Mr Cardoso emphasised that the items were never banned by the government but that the CBN only imposed restrictions on access to foreign exchange in the official market.
He said the aim of the policy at the time was to reduce pressure on the demand for dollars for importation and to encourage local production of these items.
Some of the affected items included rice, cement, margarine, palm kernel, palm oil products, vegetable oils, meat and processed meat products, vegetables and processed vegetable products, poultry, tomatoes/tomato paste, soap and cosmetics, and clothes.
Other items included private aeroplanes/jets, Indian incense, tinned fish in sauce, cold rolled steel sheets, galvanised steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes/containers, enamelware, steel drums and pipes, wire mesh, steel nails, wood particle boards, and panels.
Also affected were security and razor wire, wood particle and fibre boards and panels, wooden doors, furniture, toothpicks, glass/glassware, kitchen utensils, tableware, tiles (vitrified, ceramics), textiles, wooden fabrics, plastic/rubber products, polypropylene granules, and cellophane wrappers.
Subsequently, amidst efforts to achieve its backward integration policy on key items, the CBN added fertiliser and maize to the list of items.
The policy drove importers to source forex in the parallel market for transactions, resulting in additional pressure and demand for FX at the unauthorised window.
Within the period, prices of the food commodities among the restricted items, which are major staple foods among Nigerians, skyrocketed by over 100 per cent.
The upward trend in the prices of commodities has had a negative impact on the purchasing power of many citizens.
However, he said the move resulted in increased demand for foreign exchange in the parallel market, leading to the depreciation of the exchange rate in that segment of the Nigerian Autonomous Foreign Exchange Market (NAFEM) and widening the premium between the parallel and official market.
As a result of this, the CBN governor said revenue from tariffs on goods decreased from a high of approximately $920 million in 2011 to about $250 million in 2017.
“In 2019, the actual tariff on goods stood at $320 million, but counterfactual evidence suggests that as much as $680 million could have been earned in the same year,” he said.
Mr Cardoso said evidence has shown that foreign exchange restrictions had an adverse impact on Nigerian households and contributed to inflationary pressures.
He noted that the reduction in trade restrictions and levies on rice, sugar, and wheat by 50.0 per cent had only a minimal impact on welfare, with a 0.8 per cent improvement, and a mere 0.4 per cent reduction in extreme poverty.
The CBN boss said the benefits of trade gains for the general population were negligible, as the average industry in Nigeria pays 13.7 per cent more for its inputs.
“Lastly, it is important to note that trade policy is primarily the responsibility of the fiscal authorities, and delving into such matters falls outside the purview of the CBN,” he said.
By Adedapo Adesanya
Nigerians have kicked against suggestions by the International Monetary Fund (IMF) to the federal government to consider increasing the Value Added Tax (VAT) rate and introducing excise duties on telecommunications services as part of efforts to boost revenue generation and create fiscal space for development spending.
IMF, in its 2026 Article IV Consultation Report on Nigeria, warned that despite recent tax reforms, additional revenue measures would likely be required over the medium term to support critical social and infrastructure spending.
According to the IMF, Nigeria’s revenue mobilisation efforts must go beyond administrative improvements to address the country’s persistently low revenue-to-GDP ratio and rising expenditure pressures.
The Fund stated that, “Further tax policy changes will likely be needed, such as increasing the VAT rate, extending VAT to fuel products, rationalising tax expenditures in particular VAT exemptions on extractive industries and some customs duties, and introducing telecom excises, to complement administrative gains.”
It noted that while the recently enacted tax reforms are expected to improve revenue collection over time, some of the measures are revenue-reducing in the short term and may take time to yield significant gains.
On X (formerly Twitter), user @RealCeecee wrote – “You want to impose more suffering on people living on empty pockets. Where exactly does all this revenue go to? IMF would never give this kind of advice to any country that has good leaders, when the masses are already going through extreme suffering.”
“To be honest Nigerian need to stand its feet against the IMF, no be anything them go detect for us. The revenue they are talking about has anyone seen where it goes, let alone imposing another way to generate that will actually cause discomfort for Nigerians,” another handle, @KingMasy, wrote.
The IMF had stressed that continued revenue mobilisation is essential if the government is to sustain higher capital spending and expand social intervention programmes aimed at cushioning the impact of economic reforms on vulnerable Nigerians.
“Over the medium term, continued revenue mobilisation is essential to creating fiscal space for development and social spending,” the Fund said, adding that there was limited room to maintain the projected increase in capital expenditure without additional revenue sources.
The Bretton Woods institution, however, cautioned that the timing of any new tax measures should take into account the worsening poverty and food insecurity situation in the country.
It emphasised that any tax increases should be accompanied by a fully funded and effective cash transfer programme to shield vulnerable households from additional economic hardship.
“The timing of reforms must consider the poverty and food insecurity situation and ensure that the cash transfer system is in place and funded,” the report stated.
The IMF’s recommendation comes as Nigeria continues to grapple with weak revenue generation despite recent reforms, including the removal of fuel subsidies and efforts to improve tax administration.
The Fund projected that poverty and food insecurity could worsen amid higher global fuel and food prices, noting that poverty had already reached 63 per cent of the population while about 27 million Nigerians faced food insecurity in 2025.
It also reiterated its call for a neutral fiscal stance in 2026, warning that spending pressures linked to poverty, food insecurity and preparations for the 2027 general elections could widen fiscal deficits and increase financing needs if not carefully managed.
By Adedapo Adesanya
The National Bureau of Statistics (NBS) has revealed that Nigeria’s headline inflation rate in May 2026 rose to 15.93 per cent from 15.69 per cent in April, as the pressure from the Iran war continued to affect the global economy.
In the report on Monday, the statistical office showed that the headline inflation rate for May on a month-on-month basis was 1.75 per cent. 0.39 per cent lower than the 2.13 per cent recorded in April 2026.
On an annualised basis, the print was down from 26.06 per cent in the same month of the preceding year (May 2025). This was due to the rebasing of the calculation year from 2009 to 2024.
The rise in prices, which stemmed from the continued conflict in the Middle East, continued to stoke food prices and energy costs, which account for a huge chunk of average spending.
According to the NBS, “this can be attributed to the rate of change in the average prices of the following products: Millet whole grain, yam flour, ginger (Fresh), beef, garri, tam tuber, pepper (Fresh), cray fish, cassava tuber, Beans, Irish Potatoes, tomatoes (fresh), wheat grain (Sold loose), soya beans, guinea corn, plantain, carrots (Fresh) etc.”
The Food inflation rate in May 2026 on a month-on-month basis was 2.98 per cent, down by 0.65 percentage points from April 2026 (3.63 per cent), while on a year-on-year basis, it was 16.96 per cent and stood at 24.55 per cent in the same month of the preceding year (May 2025).
In its recent assessment of Nigeria, the International Monetary Fund (IMF) acknowledged the country’s ongoing macroeconomic reform efforts while warning that rising inflation, deepening poverty, and external shocks linked to geopolitical tensions could undermine recent gains.
The IMF projected a reversal in the disinflation trend, with headline inflation rising from 15.1 per cent in February 2026 to 15.4 per cent in March, driven largely by food price increases. It projected year-end inflation of 17.0 per cent, citing global commodity shocks and domestic pass-through effects.
The lender also recommended that the Central Bank of Nigeria maintain a cautious, data-dependent monetary policy stance following its recent steadying of interest rates at 26.5 per cent.
By Adedapo Adesanya
The Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said ongoing reforms and strategic policy implementation in Nigeria’s petroleum sector are driving significant investments and strengthening the country’s position as a leading energy destination in Africa.
Mr Lokpobiri stated this at the Management Retreat of the Ministry of Petroleum Resources, where he stressed the need for improved institutional performance and accountability to sustain growth in the sector.
According to the Minister, the federal government has deliberately pursued far-reaching reforms aimed at creating a stable and investor-friendly environment capable of attracting local and foreign capital into the oil and gas industry.
“From far-reaching institutional reforms to the effective implementation of strategic policies, we have remained committed to carrying all stakeholders along, fostering a conducive environment for investments to flourish,” Mr Lokpobiri said.
“As a result, our petroleum sector has witnessed significant investments that continue to strengthen Nigeria’s position as a leading energy destination.”
The Minister noted that the gains recorded in the sector were the product of collective efforts across the Ministry and its agencies, commending staff for their dedication and professionalism.
“The Management Retreat of the Ministry of Petroleum Resources provided an important platform to reiterate that these accomplishments would not have been possible without the collective dedication, professionalism and teamwork of every staff member across the Ministry and its agencies,” he stated.
Mr Lokpobiri said the retreat, themed Driving Institutional Performance and Accountability in the Petroleum Sector for Sustainable National Development, underscored the importance of continuous improvement in service delivery and operational efficiency.
Drawing lessons from the theme, he urged officials of the Ministry and regulatory agencies to intensify efforts toward enhancing institutional effectiveness and strengthening governance frameworks.
“I encouraged that we must redouble our efforts, continuously improve the quality of our services, and strengthen institutional performance,” he said.
The Minister further emphasised the continued relevance of fossil fuels in the global energy mix, stressing that Nigeria must leverage its hydrocarbon resources to drive economic growth while ensuring citizens benefit from ongoing reforms.
“With fossil fuel as the dominant source of energy, we must ensure that Nigerians experience the benefits of our progress and that Nigeria remains the preferred investment destination in Africa and a globally competitive hub for energy investments,” Mr Lokpobiri added.
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