The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has hinged the growth of the nation’s manufacturing sector and backward integration drive on improved local raw materials sourcing.
According to NACCIMA, the funds spent on foreign exchange can be invested in backward integration agenda for some sectors if government aids the sourcing of raw materials in the country.
With manufacturers heavily dependent on importation for raw materials used for production, NACCIMA’s National president, Bassey Edem noted that Naira will continue to be under pressure if local producers cannot access raw materials.
Besides, NACCIMA urged the Central Bank of Nigeria (CBN) to further review its Monetary Policy Rate (MPR) downwards, as high-interest rates which still hover between 17 and 28 per cent hinder the growth of Foreign Direct Investments (FDIs) and the Nigerian business community.
Edem explained that in spite of the reduction of MPR from 13 per cent to 11 per cent, credit to private sector currently stands at N18.719 trillion, which is only five per cent as against the benchmark of 25 per cent.
The NACCIMA boss during the association’s review of the state of the economy said this unfavourable trend may continue unless the CBN further reviews downwards, its MPR and enforce adequate policies to empower the real sector and also ease access to low-interest funds.
He pointed out that the effort by government to stimulate the real sector of the economy may be futile if the current trend of lending rate continues, and impedes the ability of manufacturers, entrepreneurs and indeed the real sector to access funds for operation as well as for expansion.
He said the several management policies introduced by the apex bank to stimulate the economy and salvage its currency is below the expectations of the business community, saying that while the association appreciates the review of the foreign exchange policies by the CBN to allow for behind the counter forex transaction, it is however important to note that the margin between the official rate and parallel market is too wide to support international trade considering the long list of prohibited items.