MAN observes foul play in forex allocation by commercial banks
Two month after the federal government ordered the dedication of 60% allocation of forex to manufacturers to boost export driven diversification, operators in the manufacturing sector are alleging sharp practices and favouritism among banks in the allocation of foreign exchange (forex) strictly for the purpose of importation of raw materials, plant and machinery..
The scheme is coming under the intervention programme of the Central Bank of Nigeria (CBN).
In alternative, MAN is calling on the apex bank to review the allocation of forex in the industry for greater efficiency.
The key suspicion is around the fact that whereas some private sector operators got invitations from their banks to put forward their forex demands, others, mainly small-scale operators, are yet to get feedbacks from their banks for requests sent in more than two months ago.
This has forced aggrieved operators to accuse the banks of allocating forex only to their favourite customers, adding that only large and medium-sized manufacturers have access to dollars at the interbank rates, while small-scale industries are ignored.
However, the CBN returned the allegation to the door steps of manufacturers’ saying they are guilty of round-tripping.
Already the CBN in an interview admitted that the bank had received numerous complaints from manufacturers on the subject and blamed the manufacturers for not deploying the forex they got in the past into good use, accusing them of round-tripping.
A source in the apex bank said “Yes, we have had a series of complaints from manufacturers over this (access to forex), which is why we are going to meet with all the parties involved this week. The truth is, now they are complaining they are not getting forex, but when they were getting it, what were they doing with it? They were round-tripping with it. How many jobs did they generate on account of the forex they received in the past?”
In a swift reaction to CBN’s comments, the President of the Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs, said “How can you round-trip with what you cannot get? He maintained that as it is today, manufacturers cannot get foreign exchange. No bank takes manufacturers seriously. They even laugh at us, telling us that the CBN cannot determine how they disburse the funds.
“I am supposed to meet the CBN governor this week to address the issue because he has accused us of not being fair to him. My members are complaining. The commercial banks say that the 60 per cent allocation cannot work. We hope to meet the governor to make this work. Commercial banks need to see themselves as development partners. If the apex bank issues a directive, they should be able to follow it. Since they are not complying and implementing the directive, I will find ways to see that they do so.”