CBN settles manufacturers with $660m in one month

Govt to float N120b treasury bill Nov. 16

The manufacturing sector’s foreign exchange demand put at more than $800 million has been reduced by $660 million by the Central Bank of Nigeria (CBN).

The amount is a summation of two interventions by the apex bank at the inter-bank market, particularly targeted at the sector to source raw materials and spare parts for their industries.

According to an industry source, the move by the CBN is in line with its earlier promise to ease the foreign exchange pressure on manufacturing and agricultural businesses through forward sales under the new flexible policy regime.

By the details available to The Guardian, the forex demand pressure by the manufacturers, which now being addressed also include raw materials for pharmaceutical, automobile, aviation, plant and machinery, power, telecommunications, and printing, among others.

The Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, who corroborated the source, assured that the apex bank was committed to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage were able to get letters of credit to import the required materials for their businesses.

Citing the case of some manufacturing industries in Nigeria, which had posted huge turnovers since the CBN introduced restrictions on the sourcing of forex for 41 items from the inter-bank market, Okorafor said the restriction had indeed yielded positive results.

He therefore, urged manufacturers to take advantage of the policy, which he stressed is part of efforts by the CBN to ensure that Nigeria reclaims its status as a major producer through backward integration initiatives and conserve billions of forex spent on import bills yearly.

Meanwhile, the Federal Government has unveiled plans to sell N119.92 billion (about $376.22 million) in treasury bills with short maturity on November 16.

Specifically, N32.43 billion would be auctioned for three-month security; N22.82 billion for six-month bills; while N64.67 billion reserved for one-year maturity paper.