THE NATION
he exit of multinationals from the economy due to foreign exchange scarcity can be reversed by strengthening the naira and creating room for more foreign capital inflows.
This view came from industry stakeholders, and economists, who spoke on the state of the naira and illiquidity in the forex market.
The stakeholders and economists are the President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe; Chief Executive Officer and Centre for the Promotion of Private Enterprise (CPPE) Dr. Muda Yusuf; former Executive Director, Keystone Bank Limited Richard Obire; Nigeria Country Representative, European Organisation for Sustainable Development, Jide Akintunde and Smart Exchange BDC Limited General Manager Olatunji Salaudeen.
The stakeholders said many multinationals are adversely affected by inadequate dollar supply by the Central Bank of Nigeria (CBN) and other key economic agents.
The unification of the exchange rate that saw multiple exchange rates collapse into the Investors’ and Exporters (I&E) window has impacted negatively on the operations of many multinational firms.
For instance, Nigeria’s unit of Diageo Plc recently said it was struggling to obtain dollars to pay back foreign currency loans, despite the liberalisation of the foreign-exchange market.
A Diageo subsidiary, Guinness Nigeria Plc, declared a loss of N18.2 billion for 2023 compared to N15.7 billion profit in the previous year.
Also, GlaxoSmithKline Consumer Nigeria Plc last week announced that it was winding down its operations in the country.
ABCON President, Gwadabe, said the exit of strategic foreign investors and partners, as well as losses being recorded by multinational companies, remain a worrisome development. He, however, believes that the challenges could be addressed by making enough dollars available to them.
Gwadabe warned that the trend might continue to discourage the needed foreign investments sought by the Bola Tinubu administration if the trend was not speedily reversed.
The ABCON chief, who noted that the volatility of the naira has continued to underpin the slow economic growth of Nigeria, called for a high level of thinking on the part of monetary and fiscal policymakers.
He called for the involvement of stakeholders, including BDC operators, in the formulation of monetary and fiscal policies.
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