The President of the Lagos Chamber of Commerce and Industry, Mrs Toki Mabogunje, and the President, of Manufacturers Association of Nigeria (MAN) Mr Mansur Ahmed, have tasked the Central Bank of Nigeria to review the nation’s foreign exchange policies.
According to a news report by the News Agency of Nigeria, NAN, the Heads of LCCI and MAN agreed that a working framework to expand the scope of the market mechanism in the determination of the exchange rate is needed in the country.
Mabogunje explained that the unification of the exchange rates across boards should be prioritised. This according to her would help to stimulate a sustainable recovery and bolster investor’s confidence.
Ahmed on the other hand, called on the Federal Government and the Central Bank of Nigeria (CBN) for a review of the Foreign Exchange (FX) policies of the country, as the current policies do not support the importation of unavailable local inputs.
He stressed further saying that the acute shortage of FX has resulted in persistent erosion of naira’s value, and this is a key challenge that manufacturers, industrialists and households continue to battle within Nigeria.
What they are saying
The President of MAN in his statement said:
- “The high-cost import bill for the productive inputs decreases manufacturing working capital and feeds into manufacturing commodities prices, thereby making the sector less competitive.
- “The acute shortage of FX resulting in the erosion in naira parity has been a major operational nightmare to manufacturers in the country.
- “Most worrisome is the inability of manufacturers to meet transactional obligations with oversea suppliers as required. A favourable exchange, a case of appreciation of the naira, no doubt, would present good omen and improves manufacturing production,”
Mrs Mabogunje the President of LCCI called on the CBN to take more proactive steps, as a disproportionate reliance on-demand management strategies is not a sustainable solution to the recurring foreign exchange crisis, in her words, she said:
- “While the Lagos Chamber appreciates efforts of the Central Bank of Nigeria (CBN) in preserving the scarce foreign exchange resources at a time the country is faced with relatively lower oil price and production, we reiterate our position that a disproportionate reliance on-demand management strategies is not a sustainable solution to the recurring foreign exchange crisis.
- “In the year 2021, we urge the CBN to de-emphasise demand management policies and intensify efforts in improving the supply side of the foreign exchange market.
- “We welcome the CBN’s recent policy stating that beneficiaries of Diaspora Remittances should be paid in foreign exchange. The policy is a step in the right direction in resolving the liquidity issue in the currency market by ensuring availability of foreign exchange, especially at the retail segment.
- “This should be replicated for other sources of inflows such as export proceeds, Foreign Direct Investment (FDIs), and Foreign Portfolio Investments (FPIs).“Robust remittance inflow is expected to moderate FX pressure and narrow the wide parallel market premium as economic agents would have access to a harmonised rate.”
What you should know
- It is essential to note that foreign exchange is a key determinant of investment via its link with macroeconomic and monetary determinants like inflation and interest rates.
- The volatility of a nation’s exchange rate and large depreciation in its value is a deterrent to investment, production and economic activities.
- This volatility does not only erode the real value of investment and capital. In extension, it leaves manufacturing activities under pressure, as the depreciation in naira value (decline in the real value of naira) leads to an increase in the cost of imported inputs.
- Nairametrics reported yesterday that the exchange rate between the Naira and the US Dollar weakened at the NAFEX (I&E Window) to close at N398.5/$1 on Monday, 8th February 2021. This represents a decline of 0.6% compared to the closing rate of N396.17/$1 recorded on Friday, 5th February 2021. While the exchange rate at the black market remained unchanged at N480/$1.
- Bloomberg recently reported that Nigerian naira weakened to a more than 10-month low on the interbank market on Tuesday as the nation continues to grapple with a double-whammy scenario of low-dollar supply and high demand for the greenback.
Covid-19: NPHCDA to train over 12,000 health workers to administer vaccines
The NPHCDA has revealed plans to train over 12,000 health workers to manage and administer the Covid-19 vaccines.
The National Primary Health Care Development Agency (NPHCDA) has discsloed that it has built the capacity to train over 12,000 health workers to manage and administer the Covid-19 vaccines that will arrive in Nigeria soon.
The NPHCDA disclosed this in a social media statement on Thursday, adding that after the 2- day training, participants are expected to have improved knowledge and skill on handling, storage, distribution, administration and waste management of the COVID-19 vaccine.
“Also, improved knowledge and skill on micro-planning process, demand creation and mobilizing communities for COVID-19 vaccination,” it said.
“Finally, participants will be familiar with current practices in surveillance and management of AEFI for the COVID-19 vaccine and plans for monitoring, supervision and COVID-19 vaccine Post Introduction Evaluation,” it added.
What you should know
- Nairametrics reported last week that Dr. Faisal Shuaib stated that the first batch of the 4 million AstraZeneca vaccines is set to arrive Nigeria.
- Faisal has also earlier stated that vaccine procurement by the Federal Government will also help boost Nigeria’s Primary Healthcare system.
- The NPHCDA also revealed its plan to vaccinate 109 million Nigerians in 2 years.
Finance Minister says asset sales not primarily for budget financing
The Finance Minister has clarified that the reason for sales of government assets was more to revive them than it is for financing the budget.
The Minister of Finance, Zainab Ahmed, has stated that the sale of national assets is not necessarily for budget financing, adding that some dead or non-performing assets will be sold to credible investors who can revive them.
The Minister disclosed this at the maiden edition of the State House briefing on Thursday at the State House, which was focused on the economy and economic recovery.
“The Nigerian Government recorded a 97% budget performance.
“Every year we have provisions for sale of FGN assets. 2021 is not different. There is a Bureau of Public Enterprises (BPE) workplan for this. Assets that are dead or non-performing will be sold to credible investors who can revive them. Asset sales are not primarily for budget financing,” Ahmed stated.
The Minister also said that Nigeria’s debt was still very much within sustainable limits and that the FG needed to “roll out infrastructure now, and grow the economy now, not later. Our focus is on growing our revenues.”
What you should know
- Recall Nairametrics reported recently that the Finance Minister had announced that the Federal Government said the Finance Bill 2020 was designed to reduce import duties on some commodities, including vehicles, thereby checking inflation.
- Premium Times released an exclusive report stating that the FG proposed to sell or concession no fewer than 36 of its properties to raise funds, largely to finance the 2021 budget.
- The assets include the Abuja Environmental Protection Board (AEPB), the Abuja International Conference Centre (ICC), some unnamed refineries, the Transmission Company of Nigeria (TCN), Abuja Water Board, Nigerian Film Corporation, and many others.
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