Business

Manufacturers accuse banks of foreign exchange scam

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By Kayode Tokede

As the foreign exchange market continues to deteriorate, manufacturers under the aegis of Manufacturers Association (MAN) have accused banks of involvement in foreign exchange market racketeering.

Though no bank name was specifically mentioned, the President of the association, Dr Frank Jacob disclosed to Nigerian NewsDirect during the weekend that MAN members were not willing to mention names of banks.

In his words, “MAN members are not willing to mention the names of the banks or implicate anybody. They are not ready to talk but they said such thing is going on.

“None of my members has come out to mention the names of the banks because they don’t want a backlash on them. Actually, the Governor, Central Bank of Nigeria (CBN) told me before that if I can get any of them to mention names of banks, CBN will follow it up.

“These are businessmen they don’t want anything that will affect their businesses. I tried to press on them please give me a name but they refused, though I understand their predicament.

“Essentially what we heard is that commercial banks will offer Manufacturers foreign exchange and tell them to pay official rate and pay something else under the table.

“It will be difficult to investigate that because they will put it in one account somewhere. They may even give you a different bank to go and pay in there, so we may not be able to track it. That is the problem with it,” he said.

He noted that the free fall in Naira at the foreign exchange market is  alarming on the backdrop of Federal government and CBN’s policies not working.

In his words, “I am sure CBN has done well in trying to initiate a policy but when you look at the policy in the last one year it has not worked.

“We have expected that if the policy is working there won’t be too much gap between the official rate and the black market rate because that policy is meant to close that gap however, it is not closing that gap,

He revealed that National Economic Council (NEC) has directed CBN to review its foreign exchange policy.

“There is a need to review the policy since it is not working, maybe they need to think out of the box, think of something drastic or unusual that can be done to control the current crisis

“We are not short of ideas in this country, it is implementation. The minister said that last year but we are still waiting for the review of 41 items access ban on foreign exchange to take place,” he said

He disclosed that companies are suffering as pressure continued to mount on the black market.  He revealed that MAN members were accessing foreign exchange through the autonomous sources following illiquidity in the bank.

Speaking further, the MAN president urged federal government to sell some dormant assets and revive other critical sectors of the economy.

“By selling these assets, our foreign reserve should move close to $40billion. It will give us comfort and not just bring up the foreign reserve we must also add something to that.

“If we bring up the foreign reserve, then you liberalize the foreign exchange market, you can bring in any amount and you can take any amount. Once the market is free the way it used to be, naturally more in flow will come into the country

“I think the federal government is currently considering selling some assets according to reports.

“The federal government is very slow; this is something we suggested earlier last year. They have been very slow. They should have done that long time ago. They should sell the assets to raise money for them to be able to bring up foreign reserve and they liberalize the foreign exchange markets. Naturally, there will be in flow. That moment the foreign investors will come in to invest,” he explained.

He said MAN members through the 60 per cent allocation of foreign exchange were given $570 million early this year.

“I know that CBN has released some fund. In January they released $989million out of which our members received $570 million- CBN made the 60 per cent allocation to manufacturers as promised.

“In December, CBN also released some funds, I don’t have the figure now. They are going to continue to intervene like that, even this month they are going to intervene. If they continue that way, I think some of them will be getting from the official market.

“However, the quantity of dollars released to manufacturers and investors is still too small compared to what they need, so the rest of them buy from the black market or any other source,” he said.

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