JUNE 22, 2015
AGM - From left: Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar N. Onyema, OON; President, NSE Mr. Aigboje Aig-Imoukhuede, CON and Secretary to NSE Council, Ms Tinuade Awe at the Nigerian Stock Exchange 2015 Annual General Meeting in Lagos.
Naira devaluation hits industries hard FG’s plan to create 3 million jobs annually under threat — MAN LCCI demands zero import duty for critical raw materials By FRANKLIN ALLI
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OMPANIES in the manufacturing sector of the economy that source foreign exchange to import raw materials and products have been hit hard by the devaluation of the naira and the suspension of Retail Dutch Auction System (RDAS) by the Central Bank of Nigeria (CBN). At the interbank foreign exchange market, the exchange rate of the naira to a dollar is N196.9 while in the black market it hovers between N210 to N214 to a dollar. Similarly, British Pound Sterling exchanges between N303 to N304 to the Naira, while thed
Euro exchanges for N222. Investigations by Financial Vanguard, showed that the high
CBN should examine manufacturers’ forex demand trends to ascertain the actual needs of each company
exchange rate occasioned by the suspension of RDAS policy, has wiped smiles off the faces of operators in the sector since it was implemented by the apex bank in February to tighten control on the foreign exchange market, in a bid to protect the nation's external reserves and save the Naira from further slide in value. Dr. Frank Udemba Jacobs, President of Manufacturers Association of Nigeria, MAN, noted that the impact is enormous on all manufacturers, especially those that depend on imported raw materials. According to him, the Federal Government's plan to create three million jobs annually will be a mirage
if the current exchange rate is not addressed quickly. He urged Federal Government through the CBN to create a special foreign exchange window for manufacturers. In addition, he requested the CBN to examine manufacturers’ forex demand trends to ascertain the actual need of each company for the importation of machines, spare parts and raw materials. He assured that MAN will validate beneficiaries to ensure that only bonafide manufacturers have access to such special foreign exchange window. Also, Mr. Okey Akpa, the Chairman, Executive Committee of Pharmaceutical Manufacturers Group of MAN, disclosed that the negative effects of the CBN policy of RDAS have started to trickle down to the entire pharmaceutical industry. He said companies operating in the sector are spending so much on importation of pharmaceutical glass bottles and packaging materials that are not available locally. He said this has led to further increase in the cost of production. According to the Chairman of United Allied Spare parts Dealers Association (UASPADA), Chief Bartholomew Achukwu, his members are also adversely affected. “Today the problem is dollar issue, all our businesses are collapsing. We are expecting President Muhammadu Buhari to address this issue as it is hampering growth in trade. Going by his antecedent, we believe that the economy of Nigeria will soon be better than any other country around the world,” he said. Mrs. Olaitan Efughi, Chief Executive Officer , Annabel Boutique also lamented that operators in the sector are also feeling the negative effects of the foreign exchange transactions. “I buy my goods from Dubai and Hong Kong, and I sell mainly to retailers and others who buy for personal use. But foreign exchange is a problem; most banks don’t sell BTA for people who go to Dubai for business, apart from that, there is a limit of the amount of money that the bank allows, you are not to spend more than $4000 per quarter, so basically, you have the money, but you can’t really buy much,”
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