LCCI- Forex Policy May Cause Factory Closure

The Lagos Chamber of Commerce and Industry on July 12 2015, disclosed that the Central Bank of Nigeria’s decision to discontinue foreign exchange sale to importers of 41 items might result to the closure of many manufacturing companies in the country.

According to the chamber, most of the listed items are raw materials, which manufacturing companies usually need for production.

In a communiqué it issued after a public forum with officials of the CBN in Lagos, the chamber said the policy might lead to loss of jobs.

The communiqué, signed by the Director-General, LCCI, Mr. Muda Yusuf, revealed that the new forex rule could also lead to inflation and significant reduction in the nation’s Gross Domestic Product.

“Given the dominant role of the CBN in FX supplies in Nigeria and the fact that all three ‘official’ markets are excluded, the policy means manufacturers who require any of the 41 restricted items as input and raw materials for their production may have to simply shut their operations once the existing stock is exhausted.

“The LCCI understands the CBN’s constraints and circumstances as it drew up this policy. It, however, appears as if the formulation of the policy has suffered from the CBN’s limited understanding of the manufacturing process of many of the sectors affected by this policy.

“Many of the restricted items are irreplaceable raw materials in the manufacturing process of many industries and this policy will cause significant damage to the Nigerian manufacturing sector and economy. We affirm that while there are several items on the list, which any patriotic Nigerian will not object to, there are many others that will harm the manufacturing sector” the report revealed.