Kwara, Kogi manufacturers hail withdrawal of forex from BDC operators

Manufacturers Association of Nigeria (MAN) has said that the recent policy of the Central Bank of Nigeria (CBN) to withdraw foreign exchange from Bureaux De Change (BDCs) in the country could bring a temporary hike in the exchange rate.

Though the manufacturers commended the policy despite the possible hike in the exchange rate, they said that the Nigerian economy would be better for it in the long run.

Speaking at the annual general meeting (AGM) of Kwara and Kogi States’ branch of the association in Ilorin, on Thursday, the MAN president, Engineer Mansur Ahmed, said that, “Foreign exchange is not a commodity that should be taken to the market and traded.

“In the last few months, there have been efforts by the Central Bank of Nigeria to control the flow of foreign exchange for us to get more Forex in the manufacturing sector.

“The decision by the CBN to withdraw supply of foreign exchange from the Bureaux De Change is one that the manufacturing sector is fully in support of.

“Foreign exchange is not a commodity that should be taken to the market and traded. Its availability is intended to allow those that are producing goods and services to bring in the necessary materials and equipment required in order to produce those goods and services at affordable prices.

“Clearly, that action of the CBN on foreign exchange is most welcome even if it is belated. In this regard, I affirm the support of the MAN for this policy as well as other policies in the infrastructure sector executed by the FG.

“So, the art of getting foreign exchange in the market, to me it does not make sense.
And yet we know that this process has indeed made a huge sum of forex into the BDCs. We do not see how that will help the economy.

“Certainly, if the foreign exchange is made available to our manufacturing companies, more young people will be employed and the companies will operate at higher capacity and more industries will be created while lot of the raw materials needed will be readily available.

“So, if you have to sell forex to traders in the market as if it is a commodity, you are denying the manufacturing sector these vital resources. The law of forex as it was being done is not sustainable.

“According to the CBN report, the number of BDCs exploded between 2005 and 2021 from 74 to over 6,000. Assuming giving $20,000 to BDCs weekly, this will amount to over $600m of forex weekly going into the market instead of going into industries to produce goods and services and create employment.

“How do you control the flow of forex in BDCs not to fall into the hands of those who will take it out of the country and go and stash in a foreign bank or go to the hands of those who use it to buy weapons and make our lives miserable expanding the scope of terrorism and banditry?

“So, we welcome this change by the CBN and ask that the Central Bank remain resolute. We are aware that this initiative was part of the reason for the recent hike in the forex rate. We believe it is going to be temporary.

“Those who are using it for the importation of drugs and arms and ammunition will pay anything to get it. Our message is that the CBN should remain resolute and continue to look for ways that those illicit flows can be contained for more forex to be directed to industries and to genuine legitimate users which it is supposed to be for.”

Earlier, Kwara and Kogi State chair of MAN, Bioku Rahmon, urged the federal government to apply quick remedies to support the country’s industrialists.

Mr Rahmon bemoaned the high and fast-rising Nigeria’s debt profile and sundry other challenges plaguing the manufacturing sector.

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