The Central Bank of Nigeria (CBN) said recent monetary measures by the apex bank were aimed at strengthening the local currency: help the naira to appreciate and return calm to the market.
CBN spokesman, Isaac Okorafor, said on the sidelines of the ongoing International Monetary Fund IMF/World Bank meetings in Washington DC, that the measures were deliberate to ease the difficulties encountered by small manufacturers.
Okorafor reiterated that genuine SME operators no longer have to patronize or source for foreign exchange through unofficial windows; hence the pressure on either the BDCs or any other unofficial sources with the opening of the special window is waning. He urged all participants in the foreign exchange market to co-operate with the CBN and abide with the regulatory guidelines to have hitch-free operations in the market.
He added that the Manufacturers Association of Nigeria (MAN), while acknowledging that the earlier “60 per cent foreign exchange allocation had raised their capacity, also canvassed for more dollars for the real sector players in the small-medium-scale category.” According to him, CBN had examined the request and found out that those categories of small manufacturers were being crowded out of the foreign exchange market, with attendant pressure at the parallel market and therefore took steps to address the challenges.
The bank’s spokesman noted that not only the SMEs had the special intervention offer, the bureau de change operators now get special sales of $20,000 per week to enable them cater for the low end users for tuition fee, medical and personal/business travel allowances.
The CBN Director of Financial Markets, Dr. Alvan Ikoku Jr. said eligible transactions under the new window include invisible transactions such as loan repayments, loan interest payments, Dividends or Income Remittances, Capital Repatriation, Management Service Fees and Consultancy fees.
Also on the eligible list are software subscription fees, Technology Transfer Agreements, Personal Home Remittances and any such other eligible transactions including ‘miscellaneous payments, as detailed under Memorandum 15 of the CBN Foreign Exchange Manual.
The Director-General of the West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, admitted that in economic uncertainties, several strategies are designed as counter measures, especially, as not all challenges are the same. Also CBN’s recent approaches in the management of the foreign exchange crisis, as the intermittent interventions are yielding positive results. He however, harped on sustainability.