ABCON: COVID-19, forex volatility portend more woes for businesses except…

Expect operation No Street Trading of foreign currencies soon, ABCON threatens

ABCON: COVID-19, forex volatility portend more woes for businesses except…



Foreign exchange (forex) scarcity in Nigeria portend a more difficult operation environment for businesses of various scales in the country, Alhaji Aminu Gwadabe, the president of Association of Bureaux De Change Operators of Nigeria (ABCON) has warned.

Gwadabe, who disclosed this during a chat in Lagos added that the Nigerian business environment is becoming more hostile and unbearable for local manufacturers, foreign operators and Micro, Small and Medium sized Enterprises (MSMEs) due to the escalating exchange rates, foreign exchange (forex) scarcity and the COVID-19 in the country.

He further alluded to the fact that the Nigerian business environment was already unfriendly and harsh for the country’s real sector operators following the devastating impact the coronavirus pandemic.

According to him, the horrible business environment is being compounded by the escalating exchange rates, forex scarcity coupled with the COVID- 19 as local manufacturers struggle to stay afloat in the country’s manufacturing sector.

The ABCON boss expressed dismay, saying that the coronavirus pandemic had further affected the real sector, which has been trying to raise its head from an unfriendly and harsh environment.

Steps to achieving a virile real sector growth

According to Gwadabe, one of the strongest challenges hindering the country’s real sector from attaining its optimal objectives is the long period of the border closure and multiple taxation by government agencies.

He advised that for Nigeria to come out of recession, the federal government must remove all multiple taxes levied on manufacturers, saying that the economic managers should also encourage manufacturers by way of formulating investment friendly policies.

The ABCON boss regretted that his association could not meet the demands for forex for local manufacturers following the Central Bank of Nigeria’s (CBN) regulations of exchange rates system amid poor revenue generation for Nigeria caused by low price of crude oil at the international market

Gwadabe explained that the rationing of forex in the country’s exchange window system had worsened real sector of the economy since many firms cannot get 100 per cent of forex allocations applied for from the apex bank.

“Government should grant tax holiday to manufacturers during this period of general economic hardship if we must come out of recession. They should think of incentives to manufacturers and not exploiting or punishing them with levies and taxes.

“The government should make low single digit loans available with less bureaucracy if the country must experience growth,” he said.

The Bureau De Change chieftain also added that lifting tax burden of the manufacturers would help in creating more employment, thereby lifting jobless youths out of the streets, adding that government should develop policies that will encourage competitiveness of Nigerian manufacturers.

He said: “Government should think of tangible grants to the manufacturers as well as non-interest loans to attract more visitors into the manufacturing sector.

“The government should warn its agencies to desist from seeing manufacturers as avenues to make money for themselves.”

He added that manufacturers were not making profit due to massive infrastructural deficit that has plagued the nation over the years.

“Manufacturers generate power by themselves and the cost is unbearable. What about road rehabilitation, majority lost their goods and raw materials to bad roads, their vehicles and vans breakdown on a daily basis as a result of the poor condition of our roads,” he added.