The shortage of dollar to naira in the foreign exchange (forex) market in Nigeria hits the micro, small and medium enterprises (MSMEs) the most.
This is according to the National President, Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola.
In an interview where he raised alarm about the shortage of dollar to naira and its consequence on MSMEs, Egbesola said while big firms can find financial support to cushion the effect, smaller companies cannot.
His words: “Micro and small businesses are the worst hit by the dollar scarcity and high cost of diesel. While the medium and big businesses have the ability to find financial support to cushion the effect, we do not.
“The way CBN designed it; it is easier for medium and large enterprises to access dollars from the banks, so it means we have no choice but to resort to the black market for forex. That being the case, we get it at the highest rate.
“When we come to the same market with medium and large scale businesses that get it at a cheaper rate, we already know there is a big challenge.
“Secondly, you cannot forecast your proceeds because the rate changes. If you import raw materials to produce, the next time you are going back to get dollars, you have to add your capital to your profit to get dollars at a new price and that is killing.
“The implication is that many of us are closing shops because we can no longer compete favourably with the imported ones.”
BizWatch Nigeria understands that as of Friday, June 17, 2022, the official rate of dollar to naira on the website of the Central Bank of Nigeria (CBN) was N415.87. But in the parallel market, the currencies are exchanged between N600 and N610.