Following scarcity of foreign exchange in the country, Manufacturers' Association of Nigeria, MAN, is presently lobbying the Central Bank of Nigeria, CBN, to sell, dollars directly to its members, bypassing commercial lenders.
Business Times learnt that MAN's move to shove aside commercial banks, is to counter shortage of forex presently threatening thousands of jobs in the country.
At a recent meeting with the CBN's Governor, Godwin Emefiele headed by MAN's Vice President, Ali Madugu, in Abuja recently, MAN which has about 2,700 members, asked for weekly auctions of dollars to manufacturing businesses
"We're calling for the central bank to start giving to us directly, hand-to-hand, rather than through the banks," Madugu, who is also managing director of Kano-based Dala Foods Ltd., a food processor, said in an interview in the northern Nigerian city on March 3. "Some of our member companies will run out of raw materials next month. Without restocking, what will happen? Thousands of jobs are on the line."
The International Monetary Fund estimates the economy grew 3 percent in 2015, the slowest pace since 1999. As a result, manufacturing is in declined during the first three quarters of the year.
Presently, the central bank sells foreign exchange to commercial banks who then distribute it to their customers. This has left manufacturers short since the banks often prioritize other businesses and individuals, Madugu told Bloomberg. The MAN hopes to receive a response from the central bank this week, he said.
"The banks have everybody as their customers," Madugu said. "They even have people buying dollars for medical bills and school fees. If the central bank believes the economy must be diversified and manufacturing boosted, they should allocate directly to us."
MAN has asked its members what their annual foreign-exchange needs are so that it can give the central bank an indication of how big the weekly dollar sales would need to be.
The central bank stopped weekly auctions to non-bank money-changers in January in a bid to save its foreign reserves. Those have fallen 10 percent to $27.8 billion in the past year as Brent crude prices have declined one-third to about $39 a barrel.
Nigeria, which derives about two-thirds of government revenue from oil, has rationed dollars and brought interbank foreign-exchange trading to a halt since February last year in a bid to prevent the naira falling. The measures have all but pegged the currency at 197-199 per dollar. As dollars have become more scarce, the black-market exchange rate has plummeted to 310, while forwards prices suggest the naira will fall to 291 in a year
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