FG reopens more borders this week as experts foresee spike in forex rate

The Federal Government is expected to reopen the remaining land borders this week amid concerns by experts that the action might impact negatively on local manufacturers whose products cannot compete against their foreign counterparts.  Some experts who spoke to The naira exchange rate could rise because  of rising forex demand.

Professor of Capital Market at Nasarawa State University, Keffi, and former Commissioner of Finance, in Imo State,  Uche Uwaleke observed that apart from the negative impacts, customs collections will increase and this will affect  government’s  revenues.

“As I mentioned earlier, the reopening of the borders, especially in this festive period, will help moderate inflationary pressure and lower the cost of commodities. Government’s revenue is expected to increase through increased customs collection.

“Although it may affect local manufacturers whose products are still not in a position to compete with imported goods, this was why the government has excluded rice from what can be imported.

“Another likely negative impact of border reopening is on the exchange rate which may rise especially at the parallel market as traders will demand forex for imports,” he said.

Eze Onyekpere at Centre for Social Justice (CSJ), is of the opinion that the closure of the border was an affront on Nigerian neighbours.

He observed that the closure has hurt free trade facilitation within the West African subregion and has negatively impacted the Nigerian economy as well as the livelihood of its people.

“In the first place, the closure of the borders was an unintelligent knee jerk reaction to economic challenges which were improperly understood. Smuggling per se cannot be an intelligent reason for border closure. It calls for the redoubling of efforts by the Customs Service, which is statutorily charged with policing the borders. It also calls for deeper engagement with the authorities of countries who are our next-door neighbours. Border closure, even if justified by any circumstance should have been an ad hoc position that should not last more than one or two months so as to rectify the challenges associated with the open border.

“The closure has hurt free trade within the West African subregion and negatively impacted on the Nigerian economy and the livelihood of its people. Our neighbours have even viewed it as an act of economic aggression. What even rankled most was the reopening of the borders for two countries alone. This is an overwhelming evidence of state capture and the failure of economic governance. This is what happens when lack of capacity is coupled with integrity deficits at the highest levels of economic governance. “Reopening the borders should have been done so many months ago” he maintained…”  (Daily Sun)