By Onyema Uwalaka, Lagos
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, has expressed doubt over the ability of commercial banks to meet the demand of foreign exchange, FX, as stipulated by the Central Bank of Nigeria, CBN.
The NACCIMA President, Ide John C. Udeagbala, stated this during the association’s third quarter Council meeting in Akure, the Ondo State capital.
According to Udeagbala, the outcome of the CBN’s action to suspend the sale of FX to Bureau De Change, BDCs, would depend on the efficiency of its alternative, which is the use of commercial banks to carry out FX sales to the general public.
Recall that a few months ago Nigeria’s apex bank announced its withdrawal from supplying foreign exchange to BDCs, saying their activities aided money laundering in the country. The CBN had also mandated that commercial banks should be the only suppliers of FX to customers.
But the NACCIMA boss pointed out that as long as the demand for FX outweighs the supply, the issues of inaccessibility and high rates would remain.
“This is largely because our economy remains import dependent for raw materials and intermediate goods on which our production activities rely,” he said.
Udeagbala who lamented that access to FX was a cause for concern for the association’s members therefore appealed to the government to do more to promote and encourage exports from Nigeria such that more FX is earned into the country.
“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.”
He urged the CBN to provide a special window for foreign exchange when providing loan interventions for Nigerian businesses.
“There are some 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% 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.
Udeagbala therefore appealed to members of the association for continued support as his executive embark on a journey to build on past successes and reposition the association for the expected impact by the Private Sector on the economy and the nation.