According to a top source in the apex Bank, “The aim of CBN is to
ensure that the divergence between the official and parallel rate does not
exceed N3, so we are looking at a parallel market rate of N200/$ because the
downward trend in the pressure on the naira will be sustained.”
“The CBN has the capacity to sustain the downward pressure and will
deploy further currency management initiatives, while capitalising on fiscal
policies of the federal government to remain in support of non-devaluation of
the Naira. The current stand of the federal government on Nigeria’s legal
tender is Non-Devaluation. It will be unwise for anybody to be hoarding dollars
because we can assure you that Naira appreciation is going to trend upwards
going forward.”
So far, the CBN in a bid to manage the pressure on supply has
deployed over $11.7billion to support Agricultural Sector, SMEs, manufacturers
and others. This has reduced patronage of black market by end-users and has
forced rent seekers to dump the greenback thereby creating a dollar-glut in the
black-market.
The source noted that it has been observed that most of the imports
that were draining forex resources have since found local substitutes with
attendant savings in forex and shortage of demand for the greenback, which was
fuelling the pressure, this is also coming on the heels of the CBN instruction
to commercial banks to publish allocation of forex to end-users, this has in
recent times ensure that real sector of the economy and genuine users for
education and medicals have been able to access forex at official rate.
In the same vein, industry analysts have described the development
as a game changer for majority of local manufacturers in Nigeria. The
manufacturers acknowledged that the impact of CBN policy on forex since, its
inception has more than double their productive capacity, with attendant
benefits in terms of expansion to meet increasingly higher demands for their
products and services.
The Analysts said, “Conveniently, since the CBN foreign exchange
policy came into existence, production capacity by local manufacturers has
increased from 50%- 70%. This has impacted on their propensity to increase
exports with higher volumes which is expected to also earn Nigeria commensurate
higher foreign exchange earnings.”
Speaking further, the analysts are of the opinion that the policy
has helped the local manufacturers to realise the urgent need to expand because
of increasing demands for their products. Some of the manufacturers have
submitted proposals for expansion and creation of new manufacturing plants,
which the CBN has agreed to provide commensurate foreign exchange requirements
to finance such ventures that will create employment and improve Nigeria’s
capacity to attract more foreign exchange earnings.
The analysts also revealed that some of the local manufacturers are
now developing capacity to also attract foreign investors, who are exploring
investment opportunities in local firms to enjoy economies of scale and direct
access to some of the raw materials required for production without increasing
the cost of production.
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