It is important for the Central Bank of Nigeria (CBN) to ensure it keeps to its promise of boosting the nation’s Forex supply, manufacturers and experts have demanded.
Ola Oladele, CFA, in a telephone with Nairametrics, explained that the apex bank should keep its word, as the persistent downtrend in the currency black market persists. She said:
“The depreciation of the naira in the parallel market is because of low supply of FX from official sources and less optimistic outlook on the economy due to falling oil prices.
“The Bureau De Change operators haven’t received supply from official sources since our borders were closed and the crash in oil prices has made natural sellers of FX more cautious.
“We hope that the recent statements by the regulator will restore confidence and subsequently, supply to the market.”
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Meanwhile, manufacturers are also experiencing tough times getting dollars to fulfill their forex obligations, even when having so much naira to trade with, according to Bloomberg News.
CBN has been rationing forex to protect the naira amid the fall in crude oil prices and deadly COVID-19 pandemic that has reduced the country’s foreign earnings.
Dollar scarcity and a weakening naira are already adding to inflation in a country that imports all major products used by pharmaceutical firms.
“Manufacturers can’t open letters of credit as dwindling oil receipts and the lack of intervention by the central bank pushed international banks to withdraw credit relationships with local lenders,” said Fidelis Ayebae, the Chief Executive Officer of Fidson Healthcare Nigeria Plc.
“You now have a situation where nobody is holding letters of credit, no manufacturer is getting anything from their suppliers abroad because even the ones that we owe, we are not able to pay,” said Ayebae, who also heads the 180-member pharmaceutical group of Nigeria’s manufacturers’ association. “Some companies may shut 45 days from now if they are not able to import.”
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The administrative costs of the pharmaceutical company gained at least 22% due to the current headwinds and it may be forced to close operations from July, if the scarcity of dollar persists.
While the drug maker, according to Bloomberg news, got N2.5 billion from the central bank’s COVID-19 intervention fund, he has only secured $80,000.
“I need dollar equivalent of N2.5 billion. If I get $5 million today, I will be an incredibly happy man,” he added.
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However, recently, CBN started the weekly dollar sales of $100 million for small businesses and individuals in genuine need of foreign exchange.
Still, CBN Governor, Godwin Emefiele some days ago insisted that there were no shortage of dollars, and sales would resume to bureaux de change when the COVID-19 induced lockdown had eased sufficiently.
