The Manufacturers Association of Nigeria and the Association of Small Business Owners bemoaned the country’s deepening FX crisis on Sunday, claiming that their expenses were already being cut as revenue declined.
In separate interviews with The PUNCH, MAN and ASBON, the Lagos Chamber of Commerce and Industry, and industrialists claimed the free fall of the naira and the resulting forex scarcity had deteriorated Nigeria’s tough business environment in the last two months.
Some stakeholders, particularly small business owners, told newsmen that they were cutting their workforces, warning that if the FX shortage persisted, there would be enormous job losses.
The Central Bank of Nigeria stopped supplying forex to Bureau De Change operators in July, claiming that they were defeating their purpose by illegally participating in wholesale forex trading beyond the statutory threshold permitted by law.
The CBN advised businesspeople and others to obtain foreign currency from commercial banks. The naira has been in free fall since the central bank issued the decision, making it impossible for businesses to get foreign exchange.
The dollar was about N580 on Sunday, while the pound was around N780. President Obama claims that small businesses are halting production, cutting costs, and laying off people.
In an interview with newsmen, ASBON President Dr Femi Egbesola noted that small firms were the hardest hurt by the currency shortage. He claimed that some medium and large firms might still obtain a certain quantity of foreign currency from commercial banks.
Egbesola stated, “For small businesses, bureaucratic bottlenecks hamper their access in commercial banks, pushing us to the parallel market”.
“In the past few months, the naira has been on a free fall, and many of our members can no longer produce because the raw materials cannot be imported”.
“You need to get payment overseas before you can get your shipment and if you cannot get your raw materials, you are going to close shop”, he added.
He posited that some of their members that have been able to get some forex in trickles have been under-producing; stating that they have had to cut costs and downsize their staff, inflicting unemployment again. Even their products are now more expensive for consumers, suggesting that government needs to intervene at this moment to save the economy.