FX scarcity poses challenge to businesses –Manufacturer

By Merit Ibe

The Chief Executive Officer of Coleman Wires and Cables, George Onafowokan, has raised concern over  the current  uncertainty in the Nigerian forex market which is posing a great challenge to relevant administrative authorities and the industry as a whole.

Onafowokan, who said this in a chat in Lagos, stressed that the scarcity of forex was forcing businesses to consider painful alternatives such as the black market.

“The inconsistencies, poor management and lack of inflows prompt bidders to place higher bids than they actually need because at the end, they may not get up to 20 percent of the forex amount.

“This gives rise to bloated figures that do not reflect the actual demand in the market, leading to further devaluation of the local currency.”

Onafowokan, who is a nominee for the 2021 CICAN award argued, said if the apex bank increases the supply of forex to meet the demand at a market equilibrium price, there would come a time when investors and other stakeholders will be seeking to buy the Naira in exchange for foreign currencies thereby strengthening the local currency.

He advised the government to settle all outstanding forex liabilities as the first step towards easing the current crisis in the market as well as allowing the Naira to find its true exchange rate.

“I won’t say the current exchange rate of about N430 or thereabout is a true reflection of the  market price but somewhere between that and N500.”

He said government can borrow a leaf from Coleman Wires and Cables that has devised ingenious ideas to solve difficult problems. 

According to him, the company has within six years exited a negative position to grow its net worth into billions of Naira and is now working with the Transmission Company of Nigeria (TCN) to ensure steady power supply in the country with the supply of one of the latest technology driven power conductor, Gap Cable, that has the capacity to carry more load than existing cables.

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