According to the Nigeria Employers' Consultative Association (NECA), the country's industries are being negatively impacted by shrinking input and a lack of foreign currency.
Adewale Oyerinde, the Director-General of the Nigeria Employers' Consultative Association, stated during a recent media discussion in Lagos that for a firm to develop, it needs essential inputs in the form of raw materials, funding, and a stable environment.
He continued by saying that in order for businesses to prosper, there must be a welcoming regulatory environment.
Input has become a problem for most organizations, particularly in the manufacturing sector, he claimed. We must import inputs, and since importation requires foreign exchange, the lack of foreign exchange is a significant challenge. Even when foreign exchange is available, you cannot purchase from the official market.
He bemoaned, producers had to go to the black deals before they could get currency, paying twice as much as they had planned for production costs.
He observed that there was confusion surrounding monetary and fiscal policy since many institutions, particularly the apex bank and the ministry of finance, were giving opposing monetary and fiscal directives when they were meant to function in unison.
Oyerinde added that investors would avoid an unstable economy and environment with a wide range of risks.
An investor who wants to invest will search for a stable atmosphere. When such uncertainties arise, you start to second-guess whether you should invest or not, even though you can reasonably forecast that if I commit this to this project or firm, this will probably be the conclusion.
We consider it disruptive when CEOs are repeatedly called in for investigative tasks.
It leads to some instability and casts doubt on the much-touted separation of powers in our country. Because the National Assembly shouldn't get involved if the administration has the authority to take specific actions.
Our oversupply of foreign exchange is putting pressure on both the economy and the naira. Oil and gas are our main sources of foreign cash, and because of our low production levels, the amount of oil revenue we receive is relatively minimal. In our economy, big companies require foreign currency to conduct business. Thus, the problem is one of supply and demand.
Nigeria has one of the toughest business environments; starting and successfully operating a business here can test even the most seasoned businesspeople. The reality that businesses in Nigeria experience some of the toughest times anyplace in the world doesn't change just because the harshness is occasionally exaggerated and needs a little adjusting.
The impact of the Nigerian currency crisis ought to be limited in some economic sectors under normal circumstances. However, because Nigeria has a mostly unfavorable trade balance—we import more than we export—the cost of these imported resources influences commodities that are sold domestically in a roundabout way.
According to him, the business environment in the nation has been difficult, but the organized private sector anticipated that things would improve before enterprises succumbed to the difficulties they were facing.
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