CBN Forex Policy For Third Party Agent To Harm SMEs - MAN

The Manufacturers Association of Nigeria (MAN) has kicked against the cancellation of third party for foreign exchange applications stating that the new Central Bank of Nigeria (CBN) policy will affect the process that made it easier for small and medium businesses to Access forex.

AllNews had reported that the CBN ordered banks not to transact with third party requesting for forex going forward, as the CBN want to deal directly with companies in need of forex, not agent acting on the companies behalf. The CBN said this will prevent double-handling and ensure proper utilisation of the forex.

However, the President of MAN, Mansur Ahmed, said the policy will negatively impact small and medium manufacturers who deal with accredited agents as many Original Equipment Manufacturers abroad don't sell to individual buyers directly - Ahmed said this helps to lower prices during procurement.

According to a statement from Ahmed, “Given the prevailing extremely stressful operating environment our fragile manufacturing sector is contending with, the implementation of this new directive is like hammering the last nail on the coffin of many of our ailing members."

The body added that “In Nigeria, central procurement plays a critical role in the production process, an absence of same will hamper manufacturers operating in the country and may result in factory shutdowns.

“In the absence of a global procurement agency, most companies would not have access to the final suppliers, who consider the inherent country risks a disincentive for trading directly with companies in Nigeria.”

MAN advised that the CBN should adopt a phased approach in eliminating the third party process rather than an outright elimination. It was gathered that the agents usually offer credit during foreign exchange scarcity, hence their importance to small and medium manufacturers.