By Dipo Olowookere
Banks in Nigeria have been directed by the Central Bank of Nigeria (CBN) to allocate 60 percent of their foreign exchange purchases to manufacturers.
According to the CBN, this move is to boost the manufacturers’ ability to pay for imports and boost the economy.
In a circular dated August 22, 2016, the apex bank further explained that it gave this order so as to encourage the production of local goods.
“Authorised dealers (banks) are hereby directed to dedicate at least 60 percent of their total foreign exchanger purchases from all sources to end-users strictly for the purposes of importation of raw materials, plant and machinery,” the CBN said.
There has been shortage of dollar in Nigeria due to a sharp fall in oil revenues. The floating of Naira by the CBN in June 2016 did not also solve the problem as thought.
Manufacturers in the country have for a long time expressed their inability to import raw materials and spare parts because of the dollar shortages, forcing some of them to close their plants.