CBN allocates manufacturers $660m FX to ease pressure

The Central Bank of Nigeria (CBN), said it has allocated 1,342 manufacturing and trading firms foreign exchange through its recent intervention.

The apex bank said it sold a total of $660m to the firms through FX forwards to their respective banks for onward sales to the firms.

CBN said the move was in line with its earlier promise to ease FX pressure on manufacturing and agricultural businesses through forward sales under the flexible FX regime.

In a publication on its website titled: “FX Utilization for banks for September 2016,” the apex bank stated that the FX was for procurement of raw materials, plants and machinery by manufacturers and other real sector operators.

Some of the beneficiaries of the allocations in the beverage sector include – Nestle Nigeria Plc, $323,434; Nigerian Breweries Plc, $6,240,000; GlaxoSmithKline Consumer Nigeria Plc, $1,202,391; FrieslandCampina WAMCO Plc, $3,097,973.

Others include – Seven-Up Bottling Company Plc, $5,882,293.67 and Promasidor Nigeria Limited, $2,100,000.

The CBN acting Director, Corporate Communications Department, Mr. Isaac Okorafor, explained that the apex bank was committed to ensuring that manufacturers of goods for which Nigeria does not enjoy a comparative advantage were able to get Letters of Credit (LCs) to import the required raw materials for their businesses.

Citing the case of some manufacturers in the country who posted huge turnovers since the CBN introduced restrictions on the sourcing of FX for 41 items from the interbank market, Okorafor insisted that the restrictions had actually yielded positive results.

He therefore urged other manufacturers to take advantage of the policies put in place by the CBN, which he noted was part of efforts by the CBN to ensure that Nigeria reclaimed its place as a major producer through backward integration initiatives and conserve billions of FX spent on import bills annually.

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