High exchange rate killing manufacturing, businesses in Nigeria-KWACCIMA

President/Chairman of Council, Kwara Chamber of Commerce, Industry, Mines and Agriculture, Alhaji Olalekan Fatai Ayodimeji, has said the current high exchange rate of naira to the dollar was negatively affecting manufacturing and other businesses in Nigeria.

In an interview on Monday, he lamented that many manufacturers and business owners had incurred debts and liabilities as a result of the dip in the value of the naira.

According to him, to worsen the challenge, many manufacturers and other business proprietors find it hard to access foreign exchange.

Ayodimeji added that it was also difficult for many of them to get the dollar at the official rate.

He stated that these challenges had strangulated manufacturing and business activities in the country.

He called on the Central Bank of Nigeria to urgently address these anomalies, to boost manufacturing, business activities, job and wealth creations as well as economic advancement.

He added that addressing the challenges will also result in a general improvement in the standard of living and quality of life of Nigerians.

Ayodimeji said, “Most of them (manufacturers and business owners) are finding it difficult to access forex now. Apart from that, they are also getting it at a very high rate. The official rate is one thing, the rate at which you get it is another thing.

“Also some of them brought in goods when the dollar was exchanging for about N350 to $1. Those goods have not been paid for by the Central Bank of Nigeria. Now the manufacturers/business owners will still have to spend more money, more than half of that to pay because of the exchange rate since the naira has fallen. The goods were bought when the dollar was exchanging for N350 to $1.”

He added, “For example, $2,000 worth of goods purchased when one dollar exchanged for N350 will ordinarily give you N700,000 to pay back. CBN could not raise dollars to pay back, the papers are still with CBN. Now a dollar is exchanging for about N575, multiply that by two. It means you will be paying as much as N1,200,000 for something you would have paid N750,000 for.

“That the difference is a loss to any manufacturer. And it is a loss the manufacturer may not recover. This thing happened in 2016. I remember Nestle lost about N900 million. You can imagine what they are now facing again. The trend is now coming back again. So these manufacturers are now going to spend more money to pay for the equivalent dollar of what they had bought which they had even used and consumed.”