MANUFACTURERS LAMENT SCARCITY AS POLITICIANS BUY DOLLARS FOR PRIMARIES

Read Time:2 Minute, 0 Second

As the naira continues its free fall against the dollar, manufacturers in the country have lamented the worsening scarcity of the United States currency, saying their inability to get the forex they need and the excessive delay in getting the little available are killing their businesses.

However, findings revealed that the scarcity, which has driven up the exchange rate astronomically, was not unconnected with the forthcoming party primaries as many aspirants were said to have mopped up the foreign currency in the banks and the parallel market to woo the delegates.

The President, Association of Bureaux De Change Operators of Nigeria, Alhaji Aminu Gwadabe, told Sunday PUNCH that towards elections in the country, it had become a norm for forex to be volatile, coupled with supply squeeze.

He said the forex market was determined by the forces of demand and supply, explaining that demand had overshot supply.

“It is a market where demand and supply determine the price.

Do not forget that election years are associated with foreign exchange volatility, coupled with supply squeeze. This is also a political year, so you should expect this kind of situation. External reserves, inflation, cost of inputs and the Russia-Ukraine war are also key issues,” Gwadabe stated

Speaking on the impact of the dollar scarcity on the manufacturing sector, the Chairman, Manufacturers Association of Nigeria, Dr Michael Ola Adebayo, told Sunday Punch

“There is no forex. If you request say $100,000, they will give you only $1,000, and this may take 90 days.

“The $1,000 represents one per cent of $100,000, which emphasises the level of scarcity.”

He noted that manufacturers were not getting dollars from the banks.

Adebayo noted that the banks often broke requested amounts into pieces for months because forex was not available.

He said the lack of foreign exchange had also jerked up production costs of several manufacturing firms, while many had shut down.

At the association’s 48th Annual General Meeting, MAN’s President, Mansur Ahmed, said over 40 per cent of manufacturers could not get dollars to import key inputs, spare parts and machines.

“The forex guidelines and policies have a significant impact on the sector. Now, forex access in the sector is given based on some metrics, which include type of company, the amount being requested, what you are spending it on and sources of the forex, among other things,” Ahmed stated.