‘The Central Bank of Nigeria in June 2015 excluded importers of 41 goods and services from accessing foreign exchange at the Nigerian foreign exchange markets in order to encourage local production of these items. Subsequently, with the addition of fertilizer and textile products, the list grew to 43.
This action by CBN was taken in its efforts to sustain foreign exchange market stability and ensure the efficient utilization of foreign exchange as well as ensuring that optimum benefit is derived from goods and services imported into the country’ (The Bridge, March 2019)
The objective was logical and obvious.
The CBN Governor, Godwin Emiefele, a former Group MD of Zenith Bank, realized to offset collapsing Forex as a result of reducing oil revenue, something needed to be done to diversify the economy. The expansion of internal value chains and out-build of home grown production became critical.
Nigeria does not need to keep importing things she can produce.
However, in the wake of the #ENDSARS protests in Nigeria a new economic crisis may be unfolding. Reports of wanton looting and destruction is rife. These are not confined to fashionable shopping areas as are typical of developed countries experiencing civil unrest.
In the agri-sector for instance, hoodlums have been seen to be carting of fertilizers and crop treatments thinking them to be bags of garri. There are reports of bulk theft of seed maize which has harmful agrichemicals capable of making people at best, very ill, and in some cases cause death.
There are examples of this at unremarkable locations all over Nigeria. Attempts at justification centred on targeting government or ‘elites’ out of anger has no basis here. This is just opportunist targeting of misunderstood assets by the ill-informed, while there is a temporarily lapse in the effectiveness of the ‘Federal Security Network’.
Many warehouses storing ingredients and production process consumables have been sacked.
We know that fragile internal supply chains have been damaged. When the lifeblood of Nigerian trade and industry, especially that which delivers essential commodities to the masses, has been bled, then loss and damage will be passed on to customers as a cost of sales.
Those that will suffer the most from this will be the masses in Nigeria which are already struggling to even meet the breadline.
Perhaps a relaxation on Forex in some ‘Intermediate Goods’ is necessary to kick start some businesses, especially manufacturing?
I want to hear from big business and manufacturing sites in Nigeria. I want to hear from owners and from managers.
I HAVE FOUR CLEAR QUESTIONS:
- How has recent vandalism and looting in Nigeria impacted on your business/operations ?
- Would a CBN relaxation on Forex for specific commodities (please name) help to mitigate the impact?
- How do you see your company’s contribution to the Nigerian business landscape as important to the average Nigerian?
- What impact (if any) do you think a a CBN relaxation on Forex for the commodities you specified will have on the average Nigerian?
HOW TO RESPOND:
You can make your comment below.
- Most of you are probably already a LinkedIn contact. If not, send me an invitation, customising it with ‘CBN FOREX RESPONSE’. If your profile suggests a currently active business leader/decision maker in the context of this article, I will accept. LinkedIn contacts can message me directly on the platform.
- You can email me directly at [email protected] (To email address harvesters: This temporary address will be deleted 30/11/20)