The Central bank of Nigeria (CBN), in its effort to ensure access to foreign exchange by Nigerian businesses, has further opened a foreign exchange window specially for Small and Medium Enterprises (SMEs). The Apex bank says the window, which would provide not more than $20,000 to each enterprise in every quarter, is to help SMEs import eligible finished and semi-finished items.
The Acting Director, Corporate Communications of the CBN, Mr. Isaac Okorafor, who disclosed this in a statement on Monday, 10 April 2017, said that the Apex Bank’s special intervention was necessitated by its findings that many of the SMEs were being crowded out of the forex space by large firms.
According to him, under the special arrangement, enterprises with employee strength of between 10 to 199 and an asset base of between ₦5 million to less than ₦500 million, will be offered the opportunity to import eligible items within the approved threshold. The sum of $20,000 per SME customer per quarter can be effected by telegraphic transfer subject to completion of Form ‘M’, supported with proforma invoice and the importer’s Bank Verification Number (BVN).
In addition, the Bank will also sell short-tenured forwards of seven-day to 30-day maturity, as against its former practice of 60 days, to meet demand of manufacturers and all other foreign exchange users.
SMEs play a major role in the development of any economy. They contribute significantly to the national GDP and statistics show that 80% of formal jobs in emerging economies are created by SMEs.
For some time now, the Nigerian government has been implementing reforms targeted at improving the ease of doing business in Nigeria. It has also been drumming support for the practice of entrepreneurship among younger Nigerians, through provision of loans and entrepreneurship training to young graduates.
As part of the efforts towards facilitating SME businesses, this new CBN forex intervention is a very much welcome development and perhaps an Easter season delight. Such intervention by the CBN can help reduce SMEs’ heavy recourse to the parallel market for forex acquisition, thereby contributing to the appreciation of Naira and possible reduction in prices of forex dependent goods and services.
Talking about Easter season delight, we wish you all a happy Easter celebration in advance!