The Manufacturers Association of Nigeria (MAN), Ogun State branch on Friday commended the Central Bank of Nigeria on the implementation of its new flexible exchange rate policy, describing it as a positive development.
Dr Wale Adegbite, Chairman of MAN, who disclosed this in Ota noted that the CBN’s decision was commendable.
It could recalled that Dr Godwin Emefiele, the CBN Governor, had on June 14 announced the new policy is scheduled to be effective from June 20., as a flexible exchange rate system is a monetary system that allows the exchange rate to be determined by the market forces of supply and demand.
According to Emefiele, it is difficult for some of the manufacturers before the introduction of the new exchange regime to access dollar to import raw materials into the country.
”This development has forced most manufacturers to operate their factories at below 50 per cent capacity which is not good enough for the economy,” he said.
However, Adegbite explained that the new exchange policy would give manufacturers easy access to dollars and facilitate importation of raw materials.
”This will encourage domestic production in Nigeria through increase in capacity utilisation and make imported finished goods expensive under the new regime,” he noted.
He noted that the deregulation of foreign exchange market was similar to that of the petroleum sector, where availability of product and competition among marketers would bring down the pump prices.
Adegbite maintained that the competition in the new exchange rate regime would reduce prices of dollar and encourage more people to go into export.