After the Central Bank of Nigeria (CBN) unified the foreign exchange (FX) market, manufacturers in the country are expressing concerns over the lack of funds, which is slowing down access to forex for business purposes. With the new unified exchange rate, all forex windows have been collapsed and floated on the Investors’ and Exporters’ (I&E) window, requiring businesses to approach this window instead of the CBN for forex.
While the move to liberalize the forex market was initially hailed by stakeholders in the finance and manufacturing sectors, operators are now lamenting the unavailability of funds. They believe that the unification will only be effective if there is increased forex inflow, which can be achieved through increased exports, curbing oil theft, and promoting diaspora remittances.
Manufacturers are particularly affected by the lack of funds, leading to a pause in production due to the inability to purchase raw materials. The Chairman of the Manufacturers Association of Nigeria (MAN) in Apapa emphasized the need for increased exports, diaspora remittances, and the eradication of oil theft to improve the inflow of funds. They also highlighted the importance of addressing corruption in the system and the oil sector to attract more funds into the banking system.
Exporters also express optimism that the situation will normalize in the long run, with the hope that the unification would have been implemented earlier for greater stability. They emphasize the need for the government to encourage exports to bring in more dollars and combat crude oil theft, which would increase the availability of forex in the market and contribute to the appreciation of the naira.
Some business representatives feel that the implementation of policies by the new government needs improvement, suggesting that they are introducing too many policies at once. They recommend the appointment of a competent economic team to provide advice and ensure effective policy formulation and implementation.
Marketnews Thoughts: The unification of the foreign exchange market in Nigeria was a positive step towards creating a more efficient and transparent system. However, the lack of available funds is hindering businesses’ access to forex, affecting manufacturing operations and overall economic growth. To address this issue, it is crucial for the government to focus on promoting exports, curbing oil theft, and implementing effective economic policies. Additionally, the appointment of a knowledgeable and experienced economic team would help navigate the challenges and drive sustainable progress.