Why Nigerian manufacturers should reduce overdependence on imported raw materials ─CBN

*The Central Bank of Nigeria says Deposit Money Banks will sell Dollars to consumers through any of the approved channels, and if anyone is refused, such a consumer should report the erring bank, and the regulator will take action accordingly

Isola Moses | ConsumerConnect

In a move to improve Forex supply and trasctions through the DMBs in the West African country, the Central Bank of Nigeria has announced that it will inject additional US Dollars into approved banks in order to increase the economy’s foreign exchange supply.

Senior officials at CBN disclosed the Bankers’ Bank as the banking industry regulator in Nigeria could handle all valid transactions channelled through the commercial banks, ThisDay report said.

The officials reportedly noted that the black (parallel) market accounts for less than 1 percent of FX transactions in the country, and therefore, should never be utilised to decide the Dollar exchange rate in Nigeria.

US Dollar bills

The CBN officials said: “There is no reason for anyone, who needs Dollars to go to the black market as long as the person needs dollars for legitimate purposes.

“Anyone patronising the black market to buy Dollars at such rates must be engaged in illegal business because he can get the same Dollars from the banks, the CBN, investors and exporters’ window at much lesser rates.

It was gathered that CBN had met with government Ministries, Agencies and Departments (MDAs), including airline operators to discuss stopping the collection of foreign currency payments.

“Their banks will sell them Dollars through any of the approved channels. If anyone is refused, he/she should come out openly to report the bank. We will deal with the bank.

“For instance, agencies like the Nigeria Ports Authority and others that request some customers to pay dollars have been asked to stop such forthwith.

“Also, agencies such as the Federal Airport Authority of Nigeria (FAAN) or airline operators involved in charters and international airlines tickets must all be done in naira, as long as they are in Nigeria,” they stated.

The Bank’s officials as well stated that anyone who collects property rent in Dollars would face legal action, and that those in need of Dollars for international transactions should approach their respective banks.

The officials were also quoted to have said that “traders who go to the black market will lose their capital as their replacement cost can never be matched in the black market because their import will always be too expensive so they had better look inward and begin local production.

“Manufacturers, too, should reduce their overdependence on imported raw materials in production as we build an economy, where most raw materials would be sourced locally.”

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