The Lagos Chamber of Commerce and Industry, LCCI, says the Nigerian government’s foreign exchange policy robs non-oil exports of profitability.
Muda Yussuf, Director-General, LCCI, made this known in a statement obtained by PREMIUM TIMES on Saturday.
Mr. Yussuf noted that the government’s policy has led to sharp practices and corruption in the export documentation process.
According to him, the chamber had received several complaints from exporters, about the adverse effects of the current forex policy on the export business.
The LCCI boss noted that, “The policy hurts and demotivates exporters as it denies them the natural advantage of increased profitability, which a weak currency offers.”
Mr. Yussuf argued that although currency depreciation makes exports cheaper as it improves profitability for exporters, the reverse has been case for Nigerian exporters as the forex policy restricts access to export proceeds.
“The banks are, by the current regulation, the custodians of the export proceeds, which they convert to local currency for exporters at the official rate,” he argued.
“Given the free market premium of about 35 per cent, the policy represents a major disincentive to the export business. Yet, the export sector development is one of the major planks of the economic diversification programme of the present administration.
“This policy regime resulted in a decline in the official declaration of export proceeds. It has also led to sharp practices and corruption in export documentation processes,” he said.
He added that the development does not augur well for the economy and is not consistent with the objectives of the Economic Recovery and Growth Plan, as launched by the Muhammadu Buhari-led government.
“This is also a major shortcoming of the current forex policy of the Central Bank of Nigeria,” he added.
Mr. Yussuf, however, urged the Nigerian apex bank and Mr. Buhari’s Economic Management Team to urgently review the policy and allow exporters free access to their export proceeds.
“The banks should not impose conversion rates on them…all forms of restrictions to forex inflows should be removed so that the supply side of the forex market can be positively impacted and the current pressure on the forex market reduced,” he said.
“This will complement the recent efforts of the CBN to ease the pressure on the forex market, strengthen the naira exchange rate, bolster foreign reserves and boost investors’ confidence,” the LCCI boss added.