New CBN forex policy not favourable to SMEs, entrepreneurs say
Some small business owners in the Federal Capital Territory (FCT) have said that the new Central Bank of Nigeria (CBN) foreign exchange policy will not be favourable to Small and Medium Enterprises (SMEs).
Some business owners, who spoke to the News Agency of Nigeria (NAN) in Abuja on Friday, said that the policy would lead to inflation in the country.
Mr Okechukwu Maduka, building materials dealer, said the Federal Government should put up strategies to ensure that the country manufactured things people consumed.
Maduka said that the government just wanted to promote the black market where the naira would be devalued beyond everybody’s imagination.
“We are more of a consuming economy than a producing economy, so what we need is to build factories where most goods we import will be manufactured.
“If we manufacture some of those things, people will not bother about the dollar or any other foreign currency because why most Nigerians travel is to buy goods from other countries,’’ he said.
Another dealer, Mr Paul Chukwu, said the policy came at a very wrong time because of the difficulties Nigerians were facing from the high cost of goods and services.
Chukwu said the main disadvantage of a flexible exchange rate was its volatility, adding that the changes in exchange rates were more frequent and larger than the underlying fundamentals implied.
“It seems that flexible exchange rates do not change frequently enough to eliminate current account imbalances.
“An adverse effect of these misalignments is that they give deficit countries the motivation to impose trade restrictions,’’ Chukwu said.
Also, Mr Godswill Nzeli, a dealer of old refrigerators, said the policy would affect the importation of goods and lead to an increase in prices.
NAN recalls that the CBN on Wednesday unveiled new guidelines in the management of forex which will make the value of the naira to be determined by the market forces.
The new guideline is part of the CBN’s efforts to foster depth, stability and liquidity in the foreign exchange market.