By Merit Ibe Weeks after the Central Bank of Nigeria (CBN) announced the unification of all segments of the foreign excha
By Merit Ibe
Weeks after the Central Bank of Nigeria (CBN) announced the unification of all segments of the foreign exchange (FX) market, manufacturers have decried unvailability of funds which seems to be slowing down access to forex for business.
With the unified exchange rate by the new administration, the development means that all forex windows are now collapsed and floated on the Investors’ and Exporters’ (I&E) window, such that any business that needs forex need not approach the CBN anymore but the I & E window.
Stakeholders in the finance and manufacturing sector hailed the move, saying the liberalisation of the forex market would unlock huge potential for investment, berth jobs, improve capital flows and positively impact investors’ confidence going forward.
But weeks after the announcement, operators are lamenting that funds were yet to be available.
The operators are hopeful that the unification which is meant to create efficiency in the market, improve capital inflow and market penetration will only work when there is increased forex inflow which could come to pass with increased export, end to oil theft and diaspora remittance, among others.
Chairman, Manufacturers Association of Nigeria(MAN), Apapa branch decried the lack of funds for disbursment, advising that with increased exports, diaspora remittance and eradication of oil theft, there will be increased inflow.
“The key issue is unavailability of funds. If funds are available, it will be easy to disburse. The problem is that the country is not exporting enough and not earning enough from the crude oil sector. I think things will get better when people have more confidence in the system and if exporters get there money through the official window at a comfortable rate.
Also, when Dangote starts exporting crude oil and other products, we should expect better inflow. If corruption in the system and oil sector is taken care of, we should expect more fund to come into the banking system.
On his part, Export Manager of Aarti Steel Nig Ltd, Imokhai Ehimigbai, the forex situation after the announcement is still the same. Some factories are taking a break because there is no forex to purchase raw materials to continue production.
Ehimigbai, who is also a member of the Export Group of MAN, is optimistic that things will normalise in the long run, adding that if the unification has been carried out before now, things would have been stable.
He however, opined that government should encourage export to bring in more dollars and then curb crude oil crude theft.
“By that, we will have more forex available in the market and this will help the naira appreciate. What we are facing today unavailable forex in the market.
“The move by the new government is a good one. The unification has ended round tripping, which used to be a big issue because people were going to CBN to get the dollars at #445 and sell higher to buyers at the black market. Also, now exporters have access to their export proceeds, unlike before.
“It will boost repatriation of export proceeds as exporters whose export proceeds were tied to the lower official exchange rates found ways of withholding their proceeds and keeping it out of the country thereby starving the economy of much needed foreign exchange, but now the story has changed. Exporters will earn more money and this will encourage exports which in turn will shore up the value of the naira with increased inflow of foreign currency.
“CBN has said it will flood the market with forex, we hope they do so. Lets believe them.
Chairman, SMEs Group of the Lagos Chamber of Commerce and Industry (LCCI), Daniel Dickson-Okezie, believes that those implementing the policy were taking their time, since accessing Forex is still not very easy.
He said the new government was coming up with too many policies at the same time, advising that the it needs good economic team.
“The management and implementation of policies in such a way as to minimise the downsides whilst increasing the positives in an economy is the central task of policy formulation and implementation.
“The government is just coming up with too many policies at the same time. It needs to calm down, get experts in the area of the economy and finance for advice. Good economic team is needed. Till they get that, I doubt if they will make serious headway. They are just doing trial by error to impress the people-by stopping and introducing new policies, not minding the impact.
sunnewsonline.com