Extortion, Political, Environmental Factors Hindering Business Growth In Nigeria – MD Krisoral

The Managing Director/ Chief Executive Officer of Krisoral, Igwe Chris Oranu Chidume, has asked the federal government to remunerate security agents adequately in order to reduce the level of extortion in the manufacturing sector.

This is even as he decried numerous roadblocks on Nigerian roads, especially roads leading to the eastern part of the country, which he said is time-consuming and means of extorting monies from businesses that are barely surviving owing to the harsh business and political environment exacerbated by  the current forex scarcity facing manufacturers.

Chidume who was speaking recently in Lagos at the Commerce and Industry Correspondents Association of Nigeria (CICAN) 2021 workshop/ Media Awards, with the theme: ‘Impact of Forex Crisis on the Real Sector and MSMEs’ said for businesses to survive in the Nigerian environment, the negative factors have to be eliminated.

In his words: “Coming to how we survive forex crisis, is about being prudent, it is about bringing our financial knowledge to bear which still goes down to identification of values once you see them. You set your eyes on value and identify it and give it life, manifest it, save it, and do not squander it. Conserve it.

“The forex market in Nigeria is characterized with different rates from open markets and the disparity is so obvious that some people now see it as a business of getting the money from the Apex bank and reselling to others.

“More so, time is consumed and for them to collect this money they have to block the road and if they leave the road free they will not be able to extort this money from you. To be able to extort, they will cause gridlock and many at times the gridlocks you find in our environment are all artificial because that is the only way to be able to collect the intended extortion.

“But if the government give them whatever they are getting by blocking the road and causing truck business drivers to pay for it instead of blocking the road, cause gridlock and at the same time we are competing with the same market where somebody somewhere who has access to all infrastructure is coming from, to me it does not make any sense, so that is going to be my line of thoughts,” he maintained.

Also speaking at the event, Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE) Dr. Muda Yusuf, called for the adoption of a flexible exchange rate policy regime, saying it will reduce uncertainties and inspire investors’ confidence.

He said a flexible exchange rate will enhance liquidity in the foreign exchange market, adding that it is more transparent as a mechanism for forex allocation, minimizes discretion in the allocation of forex, and reduces opportunities for round-tripping and other sharp practices.

“My proposition is that we should adopt a flexible exchange rate policy regime.  Let me clarify that this is not a devaluation proposition. Rather is it is a pricing mechanism that reflects the demand and supply fundamentals in the foreign exchange market.

“It is a model that is sustainable, predictable, and transparent.  It is a policy regime that would reduce uncertainty and inspire the confidence of investors.  It is a policy framework that would minimize discretion and arbitrage in the foreign exchange allocation mechanism.” Dr. Yusuf said.

For his part, the Managing Director of NISPO, Sir Afam Mallinson Ukatu, appealed to the federal government to facilitate an investment-friendly monetary policy in order to prevent the total collapse of industries in Nigeria noting that the manufacturing and steel industry is facing lots of problems, regarding accessibility to foreign exchange to procure raw materials and spare parts.

According to him, these two important things are what keeps the manufacturers in business.

In his words: “If you are not able to have access to forex, in order to buy those items, you are collapsing the factory. The Central Bank of Nigeria (CBN) hasn’t done much in this area. Manufacturers Association of Nigeria (MAN) has been advocating that the CBN should create a window that can help genuine manufacturers’ access forex with ease but to no avail.

“We are appealing to the government to make an investment-friendly monetary policy to prevent the total collapse of industries. It is becoming so obvious that it has affected so many industries, basically because of the high exchange rates of which some have to go out of the way to buy from the parallel market to continue in production.”

Speaking further, Ukatu said that there is a need for the government to do something to help finance raw materials and spare parts.

“Furthermore, we have been advocating for a means of unification of gas prices, in terms of paying in local currency, or pegging it at a fixed rate because it is meant to be for manufacturers. Anytime manufacturers are getting gas at a fixed rate of ₦400 per Dollar, for instance, we can plan with it, but as of today, with the devaluation of Naira and with the dollar continuously going up, the rate of gas has increased and the Manufacturers are at the receiving end.

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