Nigerians are on course to pay more for electronic gadgets and computer accessories, a recent survey carried out by Nairametrics reveals.
This is as findings from the survey showed that importers and dealers in electronic gadgets operating in major markets within the Lagos metropolis expressed scepticism about the prospects of obtaining forex to fund imports from the commercial banks.
Recall that in a swift and unexpected move in July, the Central Bank Governor, Godwin Emefiele announced the discontinuation of forex sales to parallel market operators citing several infractions and illegal trading activities by Bureau de Change operators that were undermining the apex bank’s forex policy.
Although the CBN has since assured the public of foreign exchange supply at the deposit money banks, many have complained that the complex documentation process is a spanner in the works, and one that is capable of defeating the overall objective of stabilising the naira, as demand pressure mounting from dissatisfied bank customers is sure to drive exchange rate in the parallel market up with more people turning to the BDCs as alternative sources of funding their FX needs.
At the time of writing this article, the naira had seen marginal reversals in gains made over the previous few days, trading at N517 to $1 as opposed to N515 to a $1 which it had appreciated to, from an initial N525 to $1 witnessed in the wake of the CBN ban.
Although many have praised the CBN’s move as being the right thing to do, gadget and computer accessory dealers in Lagos expressed anxiety over possible price increases in the coming weeks and months as many have had to resort to the parallel market to obtain FX for imports. Already, some fast dealers are capitalising on the situation to charge higher prices for their wares despite having them in stock before the CBN-BDC scuffle.
At the popular Computer Village in Ikeja, West Africa’s largest computer accessories market, David Enoma, CEO of Noma Integrated Technology Solutions, stated that although the dollar is available in commercial banks, the troubling documentation process makes the black market a quicker and more dependable option.
“My business is time-sensitive; if we don’t act swiftly, we could lose out. The cumbersome documentation process usually serves as a deterrent to most importers from accessing FX through the banks, leading to the increased use of BDCs operators,” he said.
David also stated that product prices are strongly related to the dollar cost at the black market; hence, significant price hikes were already being witnessed for several accessories.
“Prices of goods may not dramatically increase because of the lower rate from the commercial bank. However, the scarcity of dollars may cause the reduced supply of imported gadgets and then push higher prices, but this should not be drastic as the suppliers may adapt to the new approach of obtaining dollars from the commercial bank.
“Products that would surely see price increments are the Apple iPhone, the latest android phones, and newer laptops. The older model laptops may not increase because of higher supply, but the latest ones may increase in price,” he revealed.
Gomes Adetayo, a computer specialist at MYITGUY, supported the notion of price increases, saying, “The ban of dollar sale to BDC has caused a price increase of the dollar in the parallel market. Every trader equates his goods to the dollar; the higher the dollar, the harder it is for traders to restock or even sell what they have left. Their only fighting chance against the dollar is to increase the price of whatever goods they have left.
“Looking forward to the festive period, traders would reflexively increase prices of even used gadgets and computer accessories. Although we feel sorry for our customers, price increment is the only fighting chance we have against the rising dollar. The faster we learn to assemble or produce these gadgets and their parts in our country, the better our chances of strengthening our local currency for the future generation.”
Olayinka Olaniyan, CEO of Absole Tech shared similar sentiments.
“The CBN ban of FX sale to BDCS has had significant impact on the prices of computer gadgets. Most of the products we sell are imported from the USA and Europe, showing a strong dependency on the exchange rate. Therefore, prices have jumped by least 25% by my estimation.”
He added, “I buy dollars at the black-market rate, and I need to factor that into the final price of the products I sell.”
Customers are also feeling the impact of the price increase due to the CBN ban. Victor Ojo, a customer at Computer Village said, “I’m tired of Nigeria, the price of everything seems to be increasing. And the worst increase can be seen in computer gadgets. As a content creator, I make use of computer gadgets such as phone stand, ring light, air pods, etc. Hence, this increase in prices would significantly drive up my cost and reduce my earning power. I am just tired.”
Chisom Okoronkwo, had similar complaints, saying: “All the vendors of computer gadgets were singing the same song that dollar has gone up. Since all the gadgets are basically imported, I am not surprised that the prices of computer gadgets went up. My only regret is that I did not buy these items earlier.”
What this means
Nigeria’s apex bank has sustained efforts to defend the Naira; however, inflationary concerns in the prices of imported goods could well become the reality due to bottlenecks in commercial bank procedures for accessing FX in a timely and stress-free manner.
As the festive season approaches, traders and experts project that prices could rise further, meaning that this may be the best time to make those purchases you have been procrastinating about.