As Forex Shortage Bites Harder, Experts Push For Export-Led Policies
Economists and financial experts have advised the Federal Government to prioritise policies that will help boost Nigeria’s export capacity in order to address the worsening foreign exchange crisis faced by indigenous companies.
The call is coming as manufacturing companies, which is mostly dependent on forex for their raw materials, lament the instability of dollars at the parallel market.
The reliance of local manufacturers on the black market for foreign exchange has intensified in the last six years following the delisting of 44 items from accessing the forex market by the Central Bank of Nigeria in 2016.
According to the CBN, “In the continuing effort to sustain the stability of the foreign exchange market and ensure the efficient utilisation of foreign exchange and the derivation of optimum benefit from goods and services imported into the country, it has become imperative to exclude importers of some goods and services from accessing foreign exchange at the Nigerian foreign exchange markets in order to encourage local production of these items.”
To this end, the CBN banned 44 import items from accessing FX. The items include: rice, cement, margarine, fertiliser, milk and dairy products, maize/corn, palm kernel/palm oil products/vegetable oils, meat and processed meat products, vegetables/processed vegetable products and poultry chicken, among others.
Recently Nigerian naira slumped further and exchanged to the dollar at N590 at the parallel market ahead of the Easter festive period.
The Lagos Chamber of Commerce and Industry, during its recent quarterly economic press conference, had called for better management of the country’s inflation, foreign exchange and debt portfolio indexes.
In an exclusive interview with our correspondent, a professor of Economics at the Olabisi Onabanjo University, Sheriffdeen Adewale Tella, while reacting to recent calls by the World Bank and the International Monetary Fund for Nigeria to jettison its multiple exchange rate systems and maintain a single exchange rate policy, said Nigeria’s low production output negated the validity of the charge by the international financial institutions.
Tella said Nigeria’s economic situation was a far cry from advanced economies like the United States, noting that it would be counter-productive to heed the call by the IMF and the World Bank.
He said, “We cannot just float like that. The problem with the World Bank is that they look at every economy like the American economy. There is a need to manage the currency as we are doing presently.
“We’re not producing, we are importing a lot and there’s still serious capital outflow. What we should do is start producing rather than look for all the free money that is not coming.
Similarly, a former CBN staff, Professor Jonathan Aremu, who also spoke with our correspondent, said that Nigeria’s economy lacked the “discipline” required to float the exchange rate.