The Central
Bank of Nigeria (CBN) yesterday released the names of 1,342 companies that
accessed its foreign exchange in September.
The list
posted on its website Thursday night shows that 23 banks and International
Money Transfer Organisations (IMTOs) disbursed over $660.17million during the
month to import raw materials, plants and machinery.
Recall that
CBN recently said that manufacturing industries in the country have accessed
foreign exchange valued at over $660 million in the inter-bank Market to source
raw materials and spare parts for their industries through the interbank
foreign exchange market.
According to
industry sources, the move by the CBN is in line with its earlier promise to
ease the foreign exchange pressure on manufacturing and agricultural businesses
through forward sales under the new flexible Foreign Exchange regime.
Details
indicated that the sum sourced by the manufacturers was to facilitate the
procurement of raw materials for agricultural, pharmaceutical, automobile,
aviation, plant and machinery, power, telecommunications, and printing, among
others.
Meanwhile, the
Manufacturers Association of Nigeria (MAN) on Thursday, said the Central Bank
of Nigeria’s (CBN)’s flexible exchange rate policy has led to N500 billion loss
for manufacturers.
Mr. Babatunde
Odunayo, Chairman, MAN, Apapa branch, who made the assertion during its 45th
Annual General Meeting in Lagos, said Letters of Credit (LC) and Form Ms
approved for manufacturers at N197/$ before the introduction of the new
flexible exchange rate on June 20, are now expected to be redeemed at N320.
An LC is a
letter from a bank guaranteeing that a buyer’s payment to a seller would be
received on time and for the correct amount.
“Unfortunately,
this unfolding situation poses a great burden on manufacturers since the
pricing of the related manufactured goods was made at N197 or N198 to the US
dollar when it was approved.
“Manufacturers
currently face up to N500 billion in exchange difference between the approved
Form M and LC established rates and the flexible market rate of N320 to a
dollar.
“This is a
huge loss that manufacturers are expected to bear, whereas the related goods
had been mostly sold before the commencement of the new exchange rate system,’’
Odunayo said.
He said the
exchange rate loss of N500 billion reflected in their accounts and had led to
factory closure, unemployment and loss of investments in the sector.
According to
him, the exchange rate losses will require additional working capital to shore
up cash difference between N320 and N197.
“Many of our
members are in the middle of factory projects execution but the viability of
such projects is now questionable due to recent forex developments,’’ he said.
Odunayo
stressed that if loans were not reversed to pre-flexible exchange rate at which
the transactions were contracted, losses to manufacturers would be colossal.
He urged the
government to remove pre-approved Form Ms from the flexible foreign exchange
market and deal with it through a structured sovereign loan.
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