BY OLUSHOLA BELLO, Lagos
Industrialists, under the auspices of the Lagos Chamber of Commerce and Industry (LCCI), have emphasised the need to review the current foreign exchange management model.
Speaking on the state of the economy, the president of LCCI, Mrs. Toki Mabogunje said: “the chamber notes with concerns the divergent positions of both the fiscal and monetary authorities regarding the country’s foreign exchange framework.
“Lack of cohesion among policymakers sends a negative signal to the investment community, worsens uncertainty, and further dampens investor confidence.”
She stated that, it is important for the fiscal authorities, Central Bank of Nigeria (CBN) and Economic Advisory Council to be on the same page as far as the country’s foreign exchange policy framework is concerned.
According to Mabogunje, “we reiterate our position that Nigeria’s foreign exchange policy framework needs to be reviewed to expand the scope of market mechanism in the determination of exchange rate.
“It is critically important for policymakers to harmonise the multiple exchange rates into a single market-reflective rate, which is imperative in strengthening investor confidence and engendering macro-economic stability.
“Unification of exchange rates would complement recent efforts by the CBN geared at enhancing liquidity at the supply segment of the foreign exchange market.”
She noted that “ensuring clarity on the country’s foreign exchange policy direction among participants in the investment environment is even more imperative in attracting private investments into the economy.”
She pointed out that many investors in the economy, including those in the real sector, are lamenting the difficulties in accessing foreign exchange for importation of raw materials, equipment and some critical inputs for production and processing, saying that this is in-spite of the notable recovery in crude oil prices.
“This situation is a taking a huge toll on capacity utilisation, business turnover, sales, and profitability. Sustainability of some of these investments are currently at risk with dire implications for retention of jobs.