The skyrocketing exchange rate at the moment has constituted a major headache to the nation’s economy as dollar now goes for N306. And that has taken its toll on major businesses in the country.
Some entrepreneurs ENCOMIUM Weekly sought their views on this spoke on the effect of the high exchange rate on their various businesses. They also suggested workable solutions to save the economy of imminent collapse…
That’s a big problem and it has directly affected my business. There are no two ways about it. Like you know, textile/fashion is one of the items CBN directed no sale of dollar to importers of accessories and materials. So it’s killing fashion business because our local manufacturing companies do not have an enabling environment to manufacture yet. Even adire, we do not manufacture the dye here.
My suggestion to government is not to live in denial as per the stage our economy is at every point in time. When we face the truth then we can find the right solution.
TONY ONWODI, Dessy Event
Yes, it has, because if you are going to produce an item for N200, now you have to add extra which is N300. Imagine you have to buy in bulk, then you have to pay higher. One needs to think twice before doing business in Nigeria. If a person wants to also increase the number of staff, it will restrict the person because there is no money to pay the staff once you cannot invest or do business because the money involved is too much.
The government should address the issue of naira devaluation. They should reverse their policy and if they do not, there is nothing we can do.
There’s just a bit of cost push up on some of the few raw materials being used for production. The high exchange rate is not really a hindrance presently but once the cost of production is on the higher side, then it affects sales because the price of the end product will also increase.
I would suggest that the government should create more industries, manufacturi-ng companies country so that we can produce independently and seamlessly for human use with license from Standard Organization of Nigeria. I also think it’s high time we stopped spending dollar in Nigeria. It should rather be meant for exchange. Naira is our currency and not dollar.
Last, high level of corruption has to stop starting from the executives to the ordinary man on the street. The rate of importation of goods would also decrease once these measures are implemented by the government.
As for the increment, it has really affected our business because we now spend more to bring in products that involve exchange of foreign currencies. We have to adjust our prices. The worst is that most of our customers don’t want to reason along with us. Let’s just wait and see government reforms. I know there will be light at the end of the tunnel.
EBADAN TUNDE, Clean Edge Limited
Yes, we buy materials and definitely all we buy to carry out our services have been affected by the high exchange rate. We have fixed prices for our services, but last week, when I was called for the service, I had to tell them the price has gone up. I was in the shop where I buy materials, when seller received a call that prices have increased and it immediately reflected on what I bought.
If I have the opportunity to advice the government, I will ask that they look into the Central Bank policy. They should help us make it easy to get local materials by helping local manufacturers. Some local materials are sometimes more expensive than the imported ones.
The government should encourage local production and look into power supply.
Yes, the rising exchange rate has badly affected all businesses in the country, not only mine. How do you cope as an exporter and importer or a freight forwarder when the exchange rate is skyrocketing?
For instance now, a dollar is about N306. What can one do in that kind of a situation? Now, the crude oil has fallen globally because the buyers now have oil of their own. So, no need of patronizing us again. Again for us to strengthen the naira, Nigeria needs to work on our solid minerals and agriculture. If we can do this, we will surely have something to export in replacement of crude oil. But without this, I don’t see any stability in our economy any time soon. Although, what’s happening right now is a global thing. There’s recession all over the world and that’s really affecting every country including the developed ones. Our case in Nigeria is only peculiar because the poor performance of Jonathan’s administration, especially the looted funds. And Buhari can’t rule with empty treasury.
And for the government to stabilize, he needs to recover the stolen fund. It’s then he can have time to work fully on how to reshape Nigeria’s economy via export based policy so that the naira won’t be further devaluated.
With further devaluation of naira, the economy will continue in its state of mess. All I know is that with time, this government will favour all of us. All we need is prayer and patience.
The prevalent scarcity of forex in the black market, and the attendant inflation of the rate at which we obtain them have in no small way affected our business operations. First, our inability to make prompt transfer to our foreign partners for consignments delivered, has led to an erosion of their trust on us. Goods now stay longer at ports and that means more demurrages, and frustrations. And when we eventually get them out, we still witness some level of apathy from our customers, as majority of them still find it a bit hard to comprehend and adjust to the new prices. So summarily, the increase in forex rate has only engendered a recession – less patronage, less business, and frustration.
Now, the major solution, I believe, should be to sack the present CBN governor, who I strongly believe ushered in some draconian policies that led to the whole crisis. He, it was, that suspended the weekly autonomous auction of USD to BDC’s (and that was what actually created the first scarcity of USD in the parallel market, and the attendant panic and inflation). A new CBN chief with a clear-cut idea on how to manage the situation should take over, otherwise we would witness the worse in coming months.
It has affected me, but to God be the glory. When people do not have money, they start looking for alternatives because of this high exchange rate. I am supposed to travel to celebrate Valentine, but it cannot work because of one thing or the other. People are not really buying regularly, everybody is complaining.
The government knows what they are doing. I mean, the economic meltdown is everywhere, even in oil and everything. So, let us just hope that everything gets better. It is only God that can help.
We all have to know that the change we have all been looking for has come. We should all cut our coat according to our fabrics. We should all continue to pray to God, and I believe that we will survive it.
It’s true the economy has been very unpleasant, and it has affected the price of everything including fabric and tailoring materials.
At the end of the day you find out that your charges has to also double if you want to make profits. On the other hand, the clientele rate has dropped because many can’t afford to pay almost double for the same product. So you find a way to make both parties satisfied. I try to make a deal wit my clients so that we end up having a win-win situation.
Shedico Global Concepts
It’s been really hard, to be honest. Importing anything for us has become laborious and very expensive indeed. But what do you do, do you leave the business because of that?
We’ve tried re-evaluating the volume and the companies we buy from. Also, we’ve re-negotiated payment terms to help us be able to import a good volume while also being able to sell at competitive price.
The government should come to our aid. The high exchange rate is killing business.
Yes, it is affecting my business. The prices of materials have increased and when you complain, people give the high exchange rate as an excuse. As a manufacturer, it is not convenient for me because I will get materials to do the designs and I get it at a high rate.
Diversification of the economy is long overdue. If we diversify into agriculture, then it should be mechanized. There is no reason why we cannot dedicate 100,000 acres of land for cocoa and it should be planted and harvested mechanically, and then fight corruption in the country decisively.
The security of the country should be paramount. The government is doing very well. I have serious respect for this government because for the first time in the history of Nigeria, we have a government that cares, that has conscience and the people at heart. At the same time, we need to take care of our infrastructure. We need to have power supply.