Manufacturers Criticize CBN’s Decision to Prohibit Foreign Currency Collateral for Naira Loans



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Manufacturers represented by the Manufacturers Association of Nigeria Export Group (MANEG) have raised objections to the recent directive by the Central Bank of Nigeria (CBN) instructing deposit money banks to discontinue the use of foreign currencies as collateral for naira loans within 90 days.

MANEG Chairman, Odiri Meggison Erewa, expressed concerns to The PUNCH, highlighting the potential negative impact of the CBN’s policy shift on the real sector of the economy.

The discontent arose following a circular issued by the CBN, spearheaded by Olayemi Cardoso, which underscored apprehensions about the use of foreign-currency-denominated collaterals for naira loans. The directive prohibits borrowers from leveraging dollar deposits in domiciliary bank accounts as collateral for obtaining naira loans.

In addition to critiquing the CBN’s decision, manufacturers also criticized the Association of Bureaux de Change Operators of Nigeria (ABCON) for endorsing the CBN’s directive to restrict non-oil exporters’ access to foreign exchange at the official market.

MANEG’s Chairman, Meggison-Erewa, voiced opposition to ABCON’s stance, emphasizing the potential adverse effects on production costs and investment in the manufacturing sector. She argued that excluding non-oil exporters from the official forex market would hinder Nigeria’s efforts to diversify away from oil and promote non-oil exports critical for the country’s balance of trade.

Meggison-Erewa disclosed MANEG’s intention to engage with CBN Governor Olayemi Cardoso to advocate against the implementation of the restrictive measures, underscoring the importance of stakeholder engagement in supporting Nigeria’s export-driven economic objectives.

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Peter Okafor
Peter Okafor
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