Food and fertiliser importers will have to source foreign exchange independently of the central bank as part of efforts to stem forex outflows and narrow Nigeria’s trade deficit. The country’s trade deficit widened to NGN 178.2 billion in June 2020, the largest in over 15 years. Nigeria spent 16 percent of its total import bill on food and live animals in Q2-2020, according to official data. The new foreign exchange policy is likely to be felt in the flour milling sector—Nigeria is Africa’s third largest wheat importer with a current import need (for wheat) valued at around USD1.1 billion, typically sourced from Russia, the USA and Canada. However, the challenge to access foreign exchange is likely to encompass the wider business community with US dollar obligations, and the World Bank has requested CBN flexibility in that regard.
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