Blame Forex (@blameforex) • Instagram photos and videos 11/08/ · Marketers blame forex, importation as Jet A-1 hits N/litre. By Wole Oyebade. 11 August | am Share on 04/09/ · U.S. – Blame it on Delta. blogger.com was set up back in with the aim to provide insightful analysis to forex traders, serving the trading community for over a decade. Empowering
Nigerian Manufacturers Battling Stunted Growth Blame Forex Scarcity - blogger.com
The manufacturing sector has seen woeful growth in the last five years, and a key problem is businesses can't find the dollars to import raw materials. Defying the intensity of the afternoon sun, Kazeem Ariyo walked briskly out of the premises of his bakery with palpable anger. He had just been informed that one of his retail vendors rejected hundreds of loaves of bread supply because the retail price offered was not "profitable".
Mr Ariyo, 45, is a baker operating from the Ajah axis of Lagos. In recent times, however, he has had tough times convincing his wholesale and retail vendors about the rising prices of baking materials. Mr Ariyo explained that the increase in prices of flour and other baking materials affected prices of bread, with ripple effects on the profit margin of vendors and other people on the supply value chain.
In Junethe Central Bank of Nigeria released a list of 41 items classified as "not valid for foreign exchange". With huge deficit in local production amid forex scarcity, blame forex, Mr Ariyo said manufacturers have had to source foreign exchange in the black market to enable them import raw materials, thus increasing the cost of production.
Our people source forex from the parallel market to import sugar, wheat and almost everything, at a very huge cost, blame forex. This is not just sustainable. Like Mr Ariyo, many other manufacturers told PREMIUM TIMES that they have had tough times coping with Nigeria's foreign exchange policies, devaluations, and shrinking disposable incomes that have had huge impacts on their operations and sustainability.
Shortly after President Muhammadu Buhari was sworn into office in Maythe Nigerian government excluded importers of certain goods and services from accessing foreign exchange through the country's forex markets. The move, the government blame forex, was put in place in a bid to conserve the external reserves as well as encourage local production of those items. Inamid a global crash in oil prices, the nation slipped into recession following contractions in its gross domestic product.
The recession period was characterised by a deep slump in the value of the Nigerian currency. Since oil proceeds contribute significantly to Nigeria's forex earnings, forex scarcity heightened the pressure on manufacturers and other businesses. Again inthe nation slipped into yet another recession, amid global economic shutdown induced by the coronavirus pandemic.
Nigeria's economy contracted 1. It grew 2, blame forex. But the nation's economy unexpectedly came out of the recession in the fourth quarter of as growth in agriculture and telecommunications offset a sharp drop in oil production and global demand, blame forex.
Within these years, Nigeria's exchange rate policy has been a subject of controversy, amid uncertainties in the price of forex and inadequate supply, which leads to blended rates for forex transactions. Until recently when attempts were made at convergence of rates, Nigeria ran multiple exchange rates, especially in the wake of the oil crash of There was equally the Blame forex, a market-determined rate for investors and exporters which hovers around N Then there is the "black market" rate, typically ignored by the government, which now moves around N These conflicting rates have had negative impacts on the market, and the local currency.
In the last three years, for instance, blame forex, the Nigerian currency has blame forex The performance of the manufacturing sector is closely tied to the exchange rate, says Chuks Obi, blame forex, a computer accessories dealer at Computer Village Market in Ikeja, blame forex, Lagos. Inthe Nigerian currency was devalued twice, as a means of realising convergence across the numerous forex windows. The first devaluation occurred on March 20 when the exchange rate went from N to about N on the Nafex market.
The second occurred on August 6 when it went from N to N to the dollar. In May, the Central Bank of Nigeria adopted the Nafex rate of N as the government's official exchange rate for the naira, effectively devaluing the naira by 7. However, several weeks before the devaluation exercise was announced, Nigeria's finance minister, Zainab Ahmed, blame forex, and CBN governor, Godwin Emefiele, blame forex, stirred confusion and controversies over the matter.
While Mrs Ahmed initially told reporters that the government had adopted Nafex, the CBN governor debunked the claim. Speaking at the end of the CBN's Monetary Policy Committee's meeting of MarchMr Emefiele said Mrs Ahmed's claim was false, adding that the apex blame forex maintained a 'managed float', which allows it to intervene in the market occasionally. But barely two months afterwards, the CBN finally confirmed the migration to the Nafex rate. Although the move was lauded in many quarters for its potential to harmonize the various windows, analysts said the initial CBN-Finance Ministry controversy was bad for the market.
In MarchNigeria's imported inflation climbed Meanwhile, blame forex, within the period of the sundry devaluation exercises and slump in foreign exchange earnings, Nigeria's foreign blame forex have recorded significant depletion.
But in the last quarter ofoil prices built steam as coronavirus vaccine rollouts began in parts of the world. With depleting reserves, Mr Ariyo said there is pressure on the supply end of the foreign exchange markets, amid blame forex backlog of demands. This has had devastating consequences on the manufacturing sector.
Data shows that the real GDP growth of the Blame forex manufacturing sector in the past five years has been quite poor, with only 0. Between andthe sector recorded negative growths of Mansur Ahmed, president of the Manufacturers Association of Nigeria MANsaid the lack of adequate forex has hindered manufacturers from purchasing raw materials and entering financial deals with foreign companies because they rely on forex from Bureau De Change BDC operators which comes at a higher cost.
Charles Umoren, blame forex, an importer of car appliances, blame forex, told PREMIUM TIMES in Lagos that manufacturers face other challenges in terms of obligations like security dues and multiple taxations in form of government permits.
He disclosed further that forex sourced from the parallel market accounts for the largest chunk of manufacturers' skyrocketed operating costs, which is transferred to the consumers in most cases. As parts of measures to ease scarcity, boost forex earnings, and meet manufacturers' demands, the CBN has embarked on several policy moves, blame forex.
The bank has equally called on exporters to repatriate proceeds, just as it has licensed 10 additional IMTOs for ease of forex transaction. But analysts opined that all these have yielded little in terms of returns that could boost manufacturers' efforts and enhance forex supply. In June, the Stanbic IBTC Purchasing Managers' Index moderated to Earlier, the First Bank of Nigeria's PMI reading for March eased by 3.
Analysts said this was mainly because of the difficulty manufacturers faced while sourcing blame forex to acquire raw materials. In the midst of the melee, blame forex, exchange rate policy ambiguities, forex rationing, and market shortages continue to disrupt the plans of investors and manufacturers, blame forex, worsening the business environment.
The manufacturing sector contracted by 1. As a way out of the forex scarcity conundrum, Mr Ahmed urged the CBN to focus on the supply end of the market.
In one of its meetings with Nigerian authorities in February, the International Monetary Fund advocated for a market-driven and unified exchange rate system in Nigeria, adding that it encourages transparency in exchange rate determination for investors and manufacturers.
The Bretton Woods Institution stated that multiple rates, limited flexibility and forex shortages are economic challenges and disincentives to investors. The IMF further recommended a gradual and multi-step approach to establishing a blame forex and unified exchange rate regime.
By submitting above, you agree to our blame forex policy, blame forex. Similarly, Financial Derivatives in its assessment also called for a market-determined exchange rate that is "important to boost output growth and drive industrialization especially with the commencement of blame forex African Continental Free Trade Agreement AfCFTA. The World Bank on its part called for harmonization of blame forex windows and the various rates, blame forex, as part of its conditions for resuming talk over a loan request by the Nigerian government.
Shortly after the government moved to the Nafex rate in May, the IMF said the policy was encouraging, blame forex, adding that further reforms were needed to achieve a fully unified and market-clearing exchange rate that could help boost manufacturing and ease pressure on the local currency. But despite all of the CBN's interventions, manufacturers continue to grumble over forex-induced skyrocketed costs blame forex sustainability challenge.
In May, the Association of Master Bakers and Caterers of Nigeria AMBCN increased prices of bread and biscuits by 30 percent to cushion the impact of rising cost of production. Mansur Umar, National President of the AMBCN, said increase in prices of flour and other baking materials necessitated the development.
As a means of instilling sanity in the system, the Central Bank of Nigeria on Tuesday announced the discontinuity of forex supplies to Bureau de Change Operators in the country. Mr Emefiele announced the end blame forex forex sales and new licence approval after the Monetary Policy Committee, adding that the BDCs had defeated their purpose of existence by becoming wholesale and illegal forex dealers.
He also announced that commercial banks would be monitored to provide forex for the legitimate use of Nigerians. Although the move was blame forex in several quarters, analysts have submitted that the same issues would manifest even with the banks if the fundamental concern in the market isn't addressed.
They added that the policy blame forex capable of stifling forex supply to manufacturers. In his intervention, a former Director-General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, blame forex, noted that the CBN approach would continue to deepen distortions in the economy, perpetuate round tripping, fuel speculation, blame forex, suppress forex supply and boost underground economy. He also called on the apex bank to give the market a chance and do away with a fixed exchange rate regime.
Mr Ariyo told PREMIUM TIMES that in the last four years, blame forex, two of his business associates have moved into other businesses, while one has moved to a neighbouring country, blame forex, due to Nigeria's unpredictable foreign exchange environment. He argued that a transparent forex regime would boost the growth of the manufacturing sector and prevent capital flight.
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