Currency inflow: CBN instructs banks to support local businesses

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By Lydia Ngwakwe

The Central Bank of Nigeria (CBN) has urged Nigerian banks to support local businesses to increase foreign exchange inflows and boost economic growth.

A CBN team responsible for inspecting projects financed by depository banks in Lagos, gave its opinion on Friday evening.

He noted that the apex bank relied on these companies to increase export earnings and meet the target of $200 billion in foreign exchange repatriation in three to four years.

The News Agency of Nigeria (NAN) reports that the CBN team visited Pinnacle Oil and Gas FZE, Candel Company Ltd., Lagos Free Zone and Sana Building Systems, all in Ibeju-Lekki, Lagos State.

CBN’s Head of Legal Services, Mr. Kofo Salam-Alada, during a visit to Candel Company Ltd., called on banks to help Nigerian companies increase their production in the country.

“With what the company is doing, I think bankers should actually start coming for them; it is not just the Central Bank intervention funds, Nigerian banks should actually seek them out to see how they can partner with them to get things done.

“The key thing that Nigerians also need to know is that we need to support our people, not just in terms of job creation; for the CBN wanting to increase foreign exchange in this country, it is something that needs to be supported,” he said.

Director of the banking supervision department, Haruna Mustapha, said what the company was doing was very complementary to the apex bank’s RT200, which is designed to boost the non-oil sector.

“Candel stands at two critical junctures; it’s a manufacturing outfit. CBN recently introduced the RT200 designed to boost the non-oil sector and what Candel is doing here is very complementary to that policy.

“Once again, it provides the necessary support to the agricultural sector, which will feed into government policy aimed at diversifying the productive base of the Nigerian economy.

“Ultimately, we expect to see a solid impact, especially considering the different value chains this business touches.

“So we need more support for companies like Candel and if we can get them in sufficient critical mass, the future looks bright for Nigeria,” Mustapha said.

Development finance manager, CBN, Yila Yusuf noted that the bank under its commercial agricultural credit program disbursed N2 billion to Candel, adding that they were impressed with the use of the funds .

“Candel is a company we know, we gave them 2 billion naira under our commercial agricultural credit scheme, fully paid through First Bank.

“We came here to see, mainly the production line; they have new products and we are impressed with what we have seen.

“The Central Bank will continue to support them and work with them, calming down a number of jobs, direct and indirect, that we have seen on the floor line,” he said.

Charles Anudu, Chairman of Candel Company Ltd., who noted that manufacturing companies face many challenges in doing business in Nigeria, urged banks to be development-focused as CBNs.

“We face a lot of disadvantages manufacturing in Nigeria; our cost profile is very prohibitive. You know, in Nigeria you have to generate your own electricity and to do everything, everything is expensive.

“Yet we are still competing with countries, exporting to Nigeria, while my competitors elsewhere enjoy export rebates.

“When someone is exporting from China, for example, he is already making a profit because he receives the 15% that his government pays him, I do not receive such support.

“Meanwhile, here all sorts of regulators are on our necks; The exchange rate is a bottleneck because we still have to import a lot of the materials we use and the interest rate is prohibitive,” he said.

The CBN team was also impressed with the developments from Sana Steel Company.

Team members said they were happy that some of the finished materials were destined for export to neighboring countries, which they said would increase foreign exchange inflows.

They were also delighted that most of the factory workers were all Nigerians using advanced welding machines, different types of computers and machines.

The CBN team therefore said that with what they had seen in the field, it was possible to achieve the objectives of the real sector support facilities.

The team emphasized the need for private sector involvement to grow and develop the economy.

Sana Building Systems president Ken Krieger appreciated the team and pleaded for more funds to get his company to do more.

“This plant is the result of the funding we received. Without that support, honestly, we couldn’t have made it.

“So we are very grateful that the CBN is diligently rebuilding the economy, we appreciate it and look forward to further loans,” he said. (NOPE)

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