The value of Naira has continued to nosedive as the exchange rate on the parallel market has reached N590/$1.
The development may lead to massive job loss in the manufacturing industry, among other sectors, according to the Manufacturers Association of Nigeria.
The development comes over eight months after the Central Bank of Nigeria stopped the sale of forex to Bureau de Change operators and promised to boost liquidity in commercial banks.
The exchange rate stood at N585/$1 and N785/£1 on the black market as against the N582/$1 last Friday, this is despite banks limiting customers’ access to forex, placing a cap of $20 per month for online transactions.
With electioneering campaigns gaining heat, market watchers predict that the Naira would depreciate further as aspirants for public office would reaching for the dollar-starched volts.
“The naira will keep falling because those who need dollars cannot get it and they will patronise the parallel market, increasing demand. It is also one of the fallouts of an election year. We are not earning as much FX and we will spend more financing on petrol subsidy. Ultimately, there will be a wider gap between the import and export window and the parallel market,” a government official, who craved anonymity, said.
The Chief Executive Officer of Financial Derivatives Company, Mr. Bismarck Rewane, had in January projected that the CBN would devalue the naira by the end of 2022, adding that spending on political campaigns ahead of the 2023 general elections would put more pressure on foreign exchange supply in the Nigerian economy.
“I applied for a $5,000 Business Travel Allowance through the CBN portal, but my bank said it could give me only $2,000,” said a businessman who wished to remain anonymous.
It was, however, learnt that the experiences of manufacturers were far worse.
“Never in a million years would I have thought Nigeria would get to this stage. How do you explain that a manufacturer had an invoice of $425,000 to import materials and all that is allocated to him from the CBN is $210? I can’t even wrap my brain around it,” said Bola Adefila, the Chief Operating Officer, Banrut Rolls Nig Ltd.
It was learnt that the Manufacturers Association of Nigeria MAN had approached the Federal Government for urgent intervention even as the rising cost of diesel has worsened the ease of doing business.
Spokesperson of the Central Bank of Nigeria CBN, through Osita Nwasinobi, has advised manufacturers with complaints on the matter to formally write the apex bank about their complaints.
He said, “Any manufacturer who feels that he or she is not getting adequate Forex can formally write to the CBN to communicate their complaints. As you well know these manufacturers source their Forex from banks and not from the CBN.”
