Since the Central Bank of Nigeria, CBN introduced capital controls as a center piece of its currency policy, the value of the naira has plummeted by over 38% at the black market. The CBN introduced capital controls as a way to limit the access to forex and therefore direct utilization of forex to sectors that it referred to as preferred.
Unfortunately, such policies have attendant consequences elsewhere and they are mostly negative. Apart from ordinary Nigerians who can’t access forex to carry out their personal transactions such as vacationing , paying for school fees etc. companies have also joined the growing list of those complaining.
We have decided to put together a list of companies that have been publicly complained about the currency situation and how it is affecting their business. The list will be updated frequently.
“The dollar scarcity has plunged our business into a lot of difficulties, because we have serious working capital tied up here.
“That has posed a lot of challenges to the company, because the money is sitting here earning nothing; and then we are borrowing in Ghana to finance the business in Nigeria and pay interest. So, we are not getting any of our money here and then we are paying interest on the loans we have borrowed back home. If we are not careful, we may collapse if we don’t get out.”
Managing Director Mr. Kojo Nunoo.
“We have some debts due for repayment in dollars. We have borrowed billions of dollars at N160 but the exchange rate is now above N300.
“We have the cash but we cannot pay and it affects our credit rating. The official rate is N200 but we cannot get the dollar at N200.”
Managing Director of Spectranet, Internet Service Provider in the country, David Venn.
“The forex situation is extremely tight in Nigeria, but Dangote Cement is already generating income in foreign exchange in Ethiopia, South Africa, Tanzania, Senegal and Cameroon. Further, we are also making financing arrangements through export-credit agencies for the first time.”
Mr. Aliko Dangote CEO & Group Managing Director Dangote Group Of Companies LTD.
”In Nigeria volume was flattered by an easy comparative given the election in the same period last year; cycling the forthcoming quarters will be more difficult. Underlying trading conditions remain tough and the weaker consumer environment, due to the low global oil price, continues to drive negative brand mix. It is becoming increasingly challenging to obtain hard currency in the market, and the uncertainty regarding a possible devaluation of the Naira continues to impact the business adversely.”
“We should revisit the educational system and make sure our children go to school locally. Why can’t we revisit the health care system to make sure it works better? he queried, saying, why must we spend so much money on children’s school fees overseas or medical tourism?
We have increased demands for invisibles which typically represent demands for children school fees, medicals and all of that moving on the CBN foreign exchange. The problem with that is that it tends to crowd out the critical foreign exchange that should be used in the real sector for manufacturing to support industries to encourage employment. There were questions as to how far we are going to allow this to go on. Shouldn’t we redirect these resources towards the real sector?. We focused on the real sector in this case with respect to support most of the manufacturing concerns particularly those that utilise local raw materials for production. At this stage of our economy, we need to look at how to stimulate production so that we will be able to provide goods and services to people at minimal cost”.
Herbert Wigwe, MD/CEO of Access Bank Plc
“The only solution to the present scarcity of fuel is for the CBN to assist the oil marketers in accessing forex to commence importation of petrol.
“NNPC, which at present, is the sole importer cannot distribute nationwide but private depots through their depots can do it better.
“Getting the Forex for oil marketers will go a long way to maintain steady supply,”- NUPENG.
“Importation of vehicles is no longer profitable. It does not matter whether you are importing from Europe or through the Seme border. The current exchange rate has caused the naira to crash against every major currency.“You spend so much money importing a vehicle into the country only to pay an additional 35 per cent duty. Who is going to buy the vehicle? As it is, we are unable to increase the prices of our vehicles. Things are so bad that when clients come to buy, they price the cars below the cost price and we are forced to sell at a loss.”“We implore the Federal Government to do something about the situation. Go round the market, there are empty lots all over. Already, some of us are divesting our stock in order to raise capital for other businesses. If things continue like this till June, we will have a crisis,”.President, Berger Car Dealers Association, Mr. Metche Nnadiekwe.
“We were unable to operate the stores properly any longer because we were unable to send merchandise to the stores because there’s regulation preventing that,”.
Michael Mark told Reuters in telephone interview.
“When the CBN forex restriction policy came into effect, we appealed to the Federal Government to review the policy and remove some critical items because it is hurting our business and the country‘s revenue. The reflection of that restriction is beginning to show up because we are having less cargoes in our ports. Rather than shippers bringing their cargoes to Lagos, they prefer Cotonou and they do their foreign transactions there because Benin Republic does not have such restrictions as we have.Mr Jonathan Nicol President of the association.
10. Unilever Nigeria Plc
“The dollar crunch is having a seriously adverse impact on business, says . The foreign exchange shortage has impacted our supply lines. We are spending much more time in order to secure the foreign exchange for certain raw materials, for some equipment we need for our plants,”
Yaw Nsarkoh, Unilever Nigeria’s managing director
11. Guinness Nigeria Plc
“For the past three months we have been having challenges procuring the foreign exchange we need to bring in raw materials and other imported [supplies] we need for production,” says
Sesan Sobowale, a spokesman for the Diageo subsidiary