FX scarcity: Manufacturers scavenge to pay for machineries, equipment

The Apex regulatory body of Organised Private Sector and Chambers of Commerce in the country, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture,(NACCIMA), has raised the alarm concerning accessibility to foreign exchange (forex) by the private sector operators and manufacturers at the commercial bank amid small FX percentages of the bidding amount to bidders.

Consequently, the Chamber stated that the stifling FX has resulted to many private sector operators, manufacturers and MSMEs, who have accessed Central Bank of Nigeria (CBN) interventions to fund importation of machinery and equipment facing a major challenge of repayment, as there was no window of provision to cover the foreign exchange component for such interventions.

That is following commercial banks’ complaints of nonavailability of FX to cater for the importation of machinery and equipment. National President of NACCIMA, Ide John Udeagbala, told the Sunday Telegraph in an interview that many private sector operators, manufacturers and MSMEs, who are members of NACCIMA, have lodged series of complaints at the Chamber’s Secretariat over adverse impact of stifling forex on their operations, currently causing major threat to manufacturing.

According to him, “Access to forex is a cause for concern for our members presently. Some of our members who have accessed CBN interventions to fund importation of machinery and equipment are faced with a major challenge of repayment, as there was no window of provision to cover the foreign exchange component for such interventions, as the commercial banks who bid fortnightly for FX are only allocated small percentages of the bidding amount. I urge the CBN to provide a special window for foreign exchange when providing these loan interventions for Nigerian businesses.”

He continued: “There are some of NACCIMA members who conducted feasibility analysis and applied for CBN loan interventions to enable them import machinery to boost production when the exchange rate was at N370 to $1.

“However, from the time the loans are approved up to the time these machines are fabricated, the exchange rate has shot up by almost 40 per cent, thereby increasing the eventual cost of these machines, making it almost impossible for businesses to pay back these loans due to the loss incurred due to the change in exchange rate,” he said.

(New Telegraph)