? Lauds CBN?s initiative on forex allocation
While commending the Central Bank of Nigeria (CBN) for authorising dealers to dedicate at least 60 per cent of their foreign exchange purchases from all sources to end users strictly for the purpose of importation of raw materials, manufacturers have urged the Federal Government to slash the current interest rate. The manufacturers also sought the speedy conclusion of the review of Export Expansion Grant (EEG) scheme.
According to the Manufacturers Association of Nigeria (MAN), reflating the economy would be achievable if government creates a special interest rate regime for manufacturers at a single digit rate of not more than five per cent.
MAN added that a speedy conclusion of the review of the Export Expansion Grant, will enable exporters of manufactured products to earn foreign exchange that would mitigate foreign exchange scarcity.
MAN President, Dr. Frank Jacobs, during a press briefing in Lagos noted that the new CBN circular is a welcome development and would give fillip to efforts of government aimed at reflating the economy.
He explained that the association had recommended that the list of 41 items not valid for forex should be disaggregated along tariff lines in consonance with the Standard Industrial Trade Codes to prevent misinterpretation by the Nigeria Customs Service and commercial banks. Also that essential raw materials which are not available locally should be removed from the list and the 96 finished products, which Nigerian manufacturers have capacity to produce be included in the list of items not valid for forex.
He said the CBN should implore commercial banks to give priority attention to forex requirement of manufacturers for importation of raw materials, machines and spares.
?It is gratifying to note that some of our concerns had been addressed by the government for which we are grateful. We hope that the remaining ones would equally be positively considered,? he said.
He also stressed the need to, as a matter of urgency, for federal government to review the current interest rate downward, stressing that the ruling interest rate is not investment friendly to support the economic diversification programme of the present administration.
?On behalf of the manufacturers in Nigeria, I assure the government that MAN will continue to encourage its members to engage in backward integration, import substitution and the realignment of their operations in line with the present economic realities,? he added.
According to him, the sector is better placed to engender the desired positive changes that would bring massive employment, export earnings and tax revenue for the country.
?No doubt, these are trying times but with concerted efforts from all stakeholders, we can overcome the challenges the manufacturing sector and the nation at large are facing. We only need to continue to adopt home-grown policies and strategies that have the capacity to grow our economy,? he said.
Recall that the Nigerian Textile Manufacturers Association(NTMA) had urged the Federal Government to address the huge backlog of unutilised EEG-NDDC (Negotiable duty credit certificates)- a sovereign instrument issued under the seal of the Federal government.
NTMA had suggested the redemption of NDCC?s in lieu of BoI loan instalment owed by the textile companies.
Former Director General of NTMA, Jaiyeola Olarewaju, said: ?The benefits from a competitive textile industry in Nigeria are numerous. First of all is the recurring saving of foreign exchange to the tune of $ 4 billion a year on account of import substitution. Increase in capacity utilisation will quadruple direct employment from the current level of 24,000 persons in 5 to 7 years. Greater demand for cotton will boost the income of Nigerian farmers.? ?The government needs to walk the talk and fulfil the assurances given to the sector.?