Manufacturers qualified to benefit from ‘CBN Naira4Dollar’ scheme – MAN

Manufacturers in Nigeria are more than qualified to benefit from the ‘Naira 4 Dollar Scheme’ introduced by the Central Bank of Nigeria last week, the Manufacturers Association of Nigeria has said.

The CBN had on Mar. 6 introduced the scheme, which it described as an incentive for senders and recipients of international money transfers.

It said from Mar. 8 to May 8, recipients of diaspora remittances would get N5 extra for every $1 received from abroad through licensed international money transfer operators.

“The scheme is yet another intervention of the apex bank that is set against the backdrop of the forex squeeze that was aggravated by the fall in oil prices and the COVID-19 Pandemic since the first quarter of 2020,” the Director-General, MAN, Mr Segun Ajayi-Kadir, said in a statement on Thursday.

He said the CBN had probably in a bid to avoid the full blown devaluation of the naira made several policy statements and issued several circulars, although with some flip-flops, in the management of the country’s forex.

He noted that the CBN had implemented measures that focused on addressing the downturn in dollar inflow by constraining forex demand, including the list of some items not valid for forex.

Ajayi-Kadir said the restriction of forex to some items negatively impacted some sectors.

He said, “This latest measure suggests that the CBN is taking a closer look at forex supply, incentivising it through diaspora dollar remittances to ramp up supply and help stabilise the forex situation of the country.

“I believe that the CBN will work with the IMTOs (international money transfer operators) and the deposit money banks to deal with the remittance infrastructure challenges, as well as the cost.”

He said in the face of it, the scheme should encourage Nigerians working abroad to remit more into Nigeria and thereby improve the forex inflow.

“However, we need to dimension the inflows which has historically been 70 per cent for family support and 30 percent for other purposes, including real estate which carries the greater part,” Ajayi-Kadir said.

He said in order to yield more of the anticipated inflow for investment in productive activities, the CBN would have to work with the banks and other relevant government agencies to initiate portfolios and measures to point the remitters in that direction.

He said, “There is also a need to consider where the domestic foreign exchange earners stand within the context of this scheme. For instance, could a manufacturer who exports his product and repatriates his dollar profit, get his money in dollars and also benefit from the Dollar 4 Naira Scheme?

“This way, you can guarantee almost a 100 percent re-investment in production and reap all the attendant benefits and even partly make up for the losses incurred as a result of the poor implementation of the EEG.”

“The average manufacturer who is confronted with a lot of infrastructure and macroeconomic challenges is eminently qualified, if not more qualified, to benefit from such a scheme,” he added.