The Manufacturers Association of Nigeria (MAN) has urg ed the Central Bank of Nigeria (CBN) to stop funding Bureau de Change (BDC) operators.
Its President, Dr. Frank Udemba Jacobs, wondered why BDCs should depend on official allocation of foreign exchange (forex) from the CBN, instead of exploring alternative funding windows.
Jacobs also questioned the real functions of BDCs with the kind of arrangement the nation is running. “They act as mere distributive conduit pipes by simply getting forex allocation from the CBN and selling to every Nigerian out of the multitude that need forex thereby making their profits without making value addition,” he said.
In a statement, the MAN chief said forex allocated to the BDCs should rather be channelled to the productive sectors of the economy, especially manufacturers for the importation of essential inputs and machinery that are not locally available, as well as to the social welfare segment of the society, such as hospitals and schools, among others.
Dr. Jacobs, who commended the Federal Government for combating the challenges faced by the country as a result of falling oil prices, also advocated the use of guided deregulation of the economy such that the naira would be left to flow freely within a bracket determied by the CBN.
He said the nation cannot afford to allow the naira to fall freely without any check. “MAN believes that this arrangement will allow the exchange rate to be determined by the market but with some moderation and also leave room for investors to be attracted to invest in the country.
“This will also assist in checking the ugly situation that took place during the Structural Adjustment Programme (SAP) era where, as a result of devaluation, over 60 per cent of small and medium scale industries closed down because of inability to sustain their operations,” he said.
He said restriction on dollar inflow should be lifted but this should not preclude CBN’s duty of investigating sources of such incomes.
The MAN chief said to avoid perceived abuse of forex allocation and save the naira, the management of forex, which is vested on a Committee chaired by the Governor of the CBN should monitor the utilisation of forex by recipients by remitting funds directly to the beneficiary company overseas.
On how to grow the economy, he said emphasis should be placed on the productive sector in order to raise and sustain the tempo of industrialisation. He said export of manufactured products and indeed, other finished products should be encouraged in order to make up for the deficit the nation is currently witnessing in the forex market, while exporters should be encouraged to repatriate accrued funds home.
While urging government to explore other avenues of forex inflow other than oil revenue by giving incentives to exporters, Dr. Jacobs stresed the need to encourage the manufacturing sector to grow in view of the critical role it plays in job and wealth creation as well as technology for skill acquisition.
He argued that except all these are adhered to, Nigeria’s quest to increase her forex reserve and strengthen the naira may remain a pipe dream.
While speaking against the subsidy regime, Jacobs observed that a major source of forex wastage in Nigeria is through the on-going subsidy on importation of petroleum products.
He said the country has no business relying on fuel importation to meet local needs, given the number of refineries in the country, which are currently lying idle.
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