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Forex Crisis: Massive Job Losses Loom, Profits Shrink, Say MAN, Others

 

Stakeholders including the Manufacturers Association of Nigeria and the Association of Small Business Owners on Sunday lamented the worsening scarcity of forex in the country, saying they were already cutting costs as their profits were shrinking.

MAN, ASBON and the Lagos Chamber of Commerce and Industry and industrialists in separate interviews with The PUNCH said the free fall of naira and the attendant forex scarcity had worsened Nigeria’s harsh business environment in the past two months.

 

Some stakeholders, especially small business owners, told Punch correspondents that they were reducing their staff strength, warning that there would be massive job losses if forex scarcity continued.

The Central Bank of Nigeria had in July stopped selling forex to Bureau De Change operators on the grounds that they defeated their purpose of existence through illegally dealing in wholesale trading of forex beyond the statutory benchmark allowed by the law.

 

The CBN directed businessmen and others to source forex from commercial banks.

Since the apex bank gave the directive, naira has been on a free fall and accessing forex has been difficult for firms.

As of Sunday the dollar exchanged for N580 while pounds sold for N780.

 

Egbesola stated, “For small businesses, bureaucratic bottlenecks hamper their access in commercial banks, pushing us to the parallel market.

“In the past few months, the naira has been on a free fall, and many of our members can no longer produce because the raw materials cannot be imported.

 

“You need to get payment overseas before you can get your shipment and if you cannot get your raw materials, you are going to close shop.

“Some of our members that have been able to get some forex in trickles have been under-producing. They have had to cut cost and downsise their staff. That is inflicting unemployment again. Even their products are now more expensive for consumers.

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