Dr. Muda Yusuf, the immediate past Director General of Lagos Chamber of Commerce and Industry (LCCI), has harped on the need for Nigerian government to create enabling environment to encourage export business in order to attract foreign exchange inflow.
Yusuf noted that the Nigerian economy has the capacity to attract a lot of foreign exchange because of its size, stressing that there are potential and opportunities that are still hidden.
The former LCCI DG who spoke at the monthly forum of the Finance Correspondents Association (FICAN) in Lagos on Thursday, emphasized that improving foreign exchange earning is all about creating the environment for more inflows in the form of diaspora remittances, foreign direct investment, foreign portfolio investment, export proceeds, among others.
Yusuf who spoke on the theme, “Post COVID-19 Economy in H1:2021 And Outlook for Financial Services Sector,” regretted that Nigerian exporters are passing through a lot of difficulties, adding that the way to attract foreign exchange is to export, but “if you go to the ports and see what exporters are going through, you feel sorry for them and the Nigerian economy in general.”
According to him, “we say we don’t have foreign exchange but the way to attract foreign exchange is to export. However, exporting is almost a nightmare in Nigeria.
“For instance, the process for export cannot begin until an exporter has loaded the truck and paid the truck owner.
“After paying the truck owner he will go through about two weeks of inspection and documentation. After which he will also face the traffic gridlock and before they could finish the inspection and documentation some of the products must have gone bad especially the ones that are perishable.”
Yusuf further noted that the policy of exchanging export proceeds at the Nigerian Autonomous Foreign Exchange (NAFEX) rate is not fair to the exporters because of the gap between the official and unofficial exchange rate windows.
This, he revealed, is one of the reasons why some of the exporters hide their export proceeds.
“Exporters should have free access to their export proceeds and be incentivised, just like the Nigerian diaspora were encouraged with the Central Bank of Nigeria’s naira-4-dollar exchange rate policy for remittances,” he said.
Yusuf said that looking back in to the last six months, the monetary policy makers retained policy parameters as the committee tried to maintain a balance between boosting growth recovery and curbing the monetary component of inflationary pressure.
The CBN, according to him, sustained its developmental finance intervention in the first half as part of efforts in stimulating local production.
“The bank employed administrative measures including Open Market Operation (OMO) auctions, Loan to Deposit Ratio (LDR)/ Cash Reserve Requirement (CRR) debit and special bill auctions to control excess liquidity in the banking system as a way of tackling the monetary inflationary drivers,” he said.
“The banking industry demonstrated resilience amid disruptions associated with the pandemic, attributable to the policy intervention of the CBN.”
Going by key ratios, Yusuf added that the banking industry is financially stable and sound with industry capital adequacy and liquidity ratios above regulatory threshold while non-performing loan ratios is slightly above the five percent prudential guideline.