•Seek CBN’s intervention


By Chinelo Obogo and Merit Ibe

Following the Central Bank of Nigeria’s (CBN) decision to allocate $10,000 to Bureau de Change (BDC) operators at a preferential exchange rate of N1, 251 per dollar, the Airline Operators of Nigeria (AON) has requested a dedicated channel to access foreign exchange (forex) to meet their operational needs.

Speaking to Daily Sun, the spokesperson of AON, Prof. Obiora Okonkwo, said despite the fact aviation is a very critical sector which contributes to the country’s GDP and requires a significant amount of forex to cover dollar-basedexpenses like sourcing spares and maintenance, Nigerian airlines continue to face difficulties accessing forex to meet their operational needs. He said the difficulty in obtaining readily available forex has forced domestic airlines to source for it in the open market, despite its unfavorable rates.

“Getting forex through the Investors and Exporters (I&E) window depends on the availability of funds and the inflow. If for instance, Dangote has $10 million to sell, it would depend on the time you agree with him and when you get the money and he pays into your account. If you are talking about allocation from the CBN which you file through your bank, in the past, you go to the market twice in a week and you have to wait for two days for the outcome of the bid and you may have an invoice of $100,000 and at the end, you are given only $20,000. You could still wait for two weeks and get nothing and sometimes, you wait for up to two months.

“We want the government to help airlines by creating a special window through which they can easily access forex because till date, airlines still source forex from the open market to carry out their operations,” he said.

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Also speaking on the issue, a former chairman of the Manufacturers Association of Nigeria (MAN), Frank Onyebu, told Daily Sun that most manufacturers, especially SMEs, struggle to get forex through the I&E window, which is the official channel and resort to the black market due to the difficulty and low success rates associated with the official route. He said the cumbersome process and limited forex allocation through official channels discourage manufacturers from even trying.

“Sometimes when you apply for about N100, 000 or more you end up getting 10 percent of your request, then after like two weeks, the bank returns the money to you. It keeps going on like that.A lot of companies and individuals don’t get what they want. Sometimes it depends on who you know and how much you can press for it, which is wrong.

“Majority of manufacturers, especially those in the small to medium scale category do not access FX in the official window. Most have to make do with the black market.  The fact is that most manufacturers have lost hope in the system and are therefore unwilling to invest time and energy into something that would most likely not yield expected dividends.

Accessing FX through the I&E window is cumbersome, and in most cases success rates are low. More often than not, what you get is only a tiny percentage of your requirement. It is a lot easier and much more straightforward to go for the black market.

“The government needs to prioritise provision of FX to genuine manufacturers in order to boost the economy. Note that I said genuine manufacturers. I say so because a lot of people who claim to be manufacturers do not have any plant. Some of these people, who parade themselves as manufacturers, benefit from policies created for manufacturers while genuine manufacturers come off with nothing.

“It is quite unfortunate, but that’s part of the decay in our system. It is also unfortunate that the government doesn’t appear to understand the role of manufacturing in building a thriving economy. If they did, they would go out of their ways to support the manufacturing sector in order to boost our fragile economy. A certain percentage of FX, for instance, should be reserved for certified manufacturers. In addition, manufacturers should be able to access loans at single-digit interest rates.

I hold the belief that if the government creates an attractive operating environment for manufacturers, more people (local and foreign) would invest in manufacturing; and if that happens, more jobs would be created. Our dependence on foreign goods would be reduced and FX demands would fall. Government would get more revenue from taxes, and most importantly, our economy would grow,” he said.