• Dangote regrets free fall of naira, says it affects businesses
Centre for the Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to adopt a new framework to stabilise the Customs duty exchange rate and foster economic growth.
This call came amid mounting concerns over exchange rate volatility affecting business operations and investment in the country. Chief Executive Officer of CPPE, Dr Muda Yusuf, in a statement, yesterday, emphasised the significant adverse effect of the frequent fluctuations in the Customs duty exchange rate.
Notably, the rate changed 28 times in the first quarter of the year, with additional changes in April alone. On May 1, the rate stood at N1,373.65 to the dollar, a sharp rise from under N1,200/$1 some days earlier.
Yusuf said the rapid changes introduced a high level of uncertainty, making it extremely challenging for investors to plan effectively. According to him, the unpredictability has been particularly damaging to the real sector, where it has escalated costs, heightened inflationary pressures and increased investment risks.
CPPE’s proposed framework suggests setting the Customs duty exchange rate quarterly, starting with N1,000/$1 after thorough consultation with fiscal authorities.
This approach, it added, aims to reduce the unpredictability that complicates investment decisions and risk management. He criticised the misalignment of the fluctuations with Nigeria’s economic growth objectives, stating, “This inconsistency is not conducive to our national aspirations at this time.”
He highlighted the dual challenge of dealing with both the instability in the foreign exchange market and the unpredictable shifts in international trade dynamics.
MEANWHILE, Chairman of Dangote Industries Limited, Aliko Dangote, has described the floating of the Naira by the current administration as the biggest mess that affected his company and other business owners in 2023.
Speaking at the yearly general meeting of Dangote Sugar Refinery Plc in Lagos, he stated that the policy negatively affected many businesses. His words: “We are doing whatever it takes to make sure that at the end of the day, we will be paying dividends. If you look at our dividends last year, it was almost 50 per cent. More so, we will try and get out of the mess.
“The biggest mess created was the devaluation of the Naira from N460 to N1,400.“You can see that in almost 97 per cent of the companies, especially in food and beverages businesses, none of them will pay dividends this year. But we will try and get out of it as soon as possible.
“We want to see that at the end of the day, no matter how small, we will be able to pay some dividends, especially if there is a rebound of the Naira.”
On suspension of the planned merger of Dangote Sugar Refinery with Nascon Allied Industries Plc and Dangote Rice Limited, the chairman said the Securities and Exchange Commission (SEC) wanted the rice factory to fully resume. Dangote said the facility in Jigawa State would be commissioned soon, adding that Dangote Sugar would reapply for a merger at an appropriate time.
