Since the announcement of the revised forex policy, the CBN has been pumping dollars at a consistent rate to assuage the forex scarcity it deemed responsible for the Naira’s weakening. While initial success was recorded, the CBN seems to have run into a wall recently as the Naira continues to weaken despite its continued intervention. Non-oil exporters believe they know why this is the case and it involves them.
According to non-oil exporters, the CBN has an imbalanced export-import policy, which continues to favor imports. According to them, the CBN’s interventions stimulates the importation of materials and thus exit of forex while little to no attention is paid to non-oil exports which bring in forex. Citing an example, they claim that the CBN had made it difficult for them to access their earnings from exports at the prevailing parallel market value, thus making it a disincentive for operators, having bought raw materials from farmers at street value and added value before such products were exported.
“The CBN tells you to sell your proceeds at the interbank market or use it for import. This does not make any sense considering that incurred expenses were done at the prevailing black market rate. I did some transactions in January at the prevailing black market rate of about N500. Now, I am expecting the export proceeds this month. Will it be logical and profitable to sell at N306 or even at the prevailing black market rate, considering the costs also incurred?” lamented one exporter.
This policy they say is allowing the CBN to fritter away the nation’s reserves, while promoting unwholesome gains for currency speculators. Agreeing with this opinion, the SME Group Chairman of the Lagos Chamber of Commerce and Industry (LCCI), Jon Kachikwu, chided government for its inability to live up to its expectations to businesses while expecting so much from operators.
With no support to purchase materials at the interbank market rate, exporters are left with no choice than to use the black market to purchase their materials. However, the CBN insists that the proceeds the make from exports must be sold at the interbank rate. This is practically telling exporters to run their businesses at a loss. Exporters are thus threatening to quit operation if the CBN does not create a special window for export proceeds.
“We have always advocated a window for export proceeds. It was done before because exporters are not making money. The CBN should revive it as it is becoming more profitable to cut corners, with many exporters exploiting repatriation of proceeds to neighboring African countries in order to access their dollars…We now have a situation where exporters cannot have access to their repatriated dollars, yet non-exporters can access theirs.” Chairman, Export Group, Lagos Chamber of Commerce and Industry (LCCI), Dr. Obiora Madu told Guardian.