Central Bank Of Nigeria (Cbn)

Central Bank Of Nigeria (Cbn)

CBN Forex Ban: SMEs Battle Headwind, Inflation

CBN Forex Ban: SMEs Battle Headwind, Inflation

8/1/2021 7:41:00 AM

CBN Forex Ban: SMEs Battle Headwind, Inflation

The ban of forex by the Central Bank of Nigeria(CBN) to Bureau De Change(BDC) operators is sending wrong signals to small business operators and the

This development is affecting about 95 per cent of small businesses as they are grappling to survive the inflation cost without no adequate buffers to suppress the shock.Indeed, the b an of forex will threaten the perfomances and outlook of SME products, business community and operators of small businesses in the country who will be affected with the volatility of the weak macroeconomic fundamentals.

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Reacting to the forex ban, the national president, Association of Small Business Owners of Nigeria, (ASBON), Dr. Femi Egbesola, said small businesses are the major bulk sector of the Nigerian economy which he said contributes 95 per cent to the total number of employment generation.

ADVERTISEMENTHe said the small business owners are the largest employers of labour in the country which forms the bulk of employment streams, hence, they rely majorly on black markets and BDCs because the banks are not properly standardised enough to accommodate the capacity of small business owners in the country. headtopics.com

He explained that the bureaucratic bottlenecks, documentation processes and timing to get forex from the banks are beyond the reach of small business owners, adding that, the banks have not been duly standardised to the point of accommodating the documentation processes of small business owners.

He hinted that the ban on forex will cause inflation to spiral out of control, saying, the inflationary gap will erode the purchasing power of the buyers drastically while the patronage for goods will fall.ASBON boss stated that the abrupt closure of forex policy to BDC operators is a good policy but added that, it will negatively impact on the economy, advising government to make forex available for a short-term while ensuring that it moves to liberalise the documentation processes of the BDCs against illicit forex inflows.

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