Manufacturers anticipate growth with new FX policy

Manufacturers and key business leaders say the new foreign exchange policy will encourage the growth of the ailing sector, weakened by a long period of FX crisis and poor doing business environment.

Nigeria’s central bank last week loosened its tightened grip on the FX market, introducing a flexible exchange rate system, nullifying the fixed exchange market which fixed naira at N197/N199/$.

The apex bank took the step owing to severe pressures on external reserves and FX supply crisis.

Following this measure, the Organised Private Sector (OPS) believes this will be good for the manufacturing sector.

“This will make forex available for us,” Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), told Real Sector Watch.

“We have been advocating for allowing the market to flow. It is good for market forces, and it makes manufacturers plan,” MAN president told Real Sector Watch.

In a statement signed by Muda Yusuf, director-general of the Lagos Chamber of Commerce and Industry [LCCI], the chamber said  the CBN decision will raise manufacturing capacity utilisation.

“The flexible exchange rate system will boost investors’ confidence and attract greater foreign exchange inflows to the economy,” said the chamber.

LCCI said it will reduce distortions that currently characterise the forex market and bring the economy closer to equilibrium, adding that it will result in a cut- down on arrears of remittances, which has accumulated for the past 18 months.

“It will further reduce uncertainty which investors have been grappling with over the last one year,” stressing  that there is a need for clarity on what the CBN describes as a special window for critical transactions.

“CBN should revisit the list of items that have been placed on exclusion list of the forex market. Many critical inputs of manufacturing companies are on the list and this has crippled the operations of such companies creating significant job and output losses,” the chamber added.

ODINAKA ANUDU