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By Omodele Adigun
An estimated $10 billion unmet demand backlog in the foreign exchange (forex) markets said to be causing massive depreciation of the Naira may have since plunged many companies into huge forex losses.
According to an analyst, Mr Marcel Okeke, the CEO of Mascot Consulting, those, “losses are incurred because of the fluctuations of the Naira rate, or the unification of the exchange rates.
Data from FMDQ showed that the naira, which opened at N757 per dollar on Wednesday at the official market, weakened to N915 per dollar at the black market, according to data from aboki FX..This brought the gap between both rates to the highest since the forex unification last June and put the economy under intense pressure.
Weighing on this, at the monthly forum of the Finance Correspondents Association of Nigeria (FICAN), Thursday, in Lagos, Okeke noted that the depreciation of the Naira had led to significant foreign exchange losses for corporate bodies lamenting that,“It is a challenge because those losses are incurred because of the fluctuations of the Naira, or the unification of the forex rates.
“And I have not seen anything the government is trying to do to check many of these companies which are conglomerates and multinationals, who play across the globe.
“So, if they have hard currency loans or facilities, what is happening to the Naira is what is reflected in the reports that they are coming up with…”
As long as the fate of the Naira is such that it keeps sliding against major currencies of the world, this is the kind of report that they are going to have at the end of the year,” he noted.
Okeke then callsed for quick government’s intervention to prevent further company collapses, going by the inability of some of the multinationals to repatriate their revenues and dividends home due to foreign exchange shortages.
He cited the exit of GlaxoSmithKline (GSK) as an example, Okeke expressed the hope that GSK’s departure would not trigger a trend of other companies leaving as well.
He said, “It came to my knowledge that in a couple of five years, they have been unable to repatriate their revenues and dividends and that has been the fate of other major multinationals because of the shortage of foreign exchange in the economy.
“So, when you sum all those things, that will show you how soon this economy will be doing well or how far it will not be doing well.“I pray that the exit of GSK will not turn into bandwagon for others to also leave.’’
On security, he observed that the government’s efforts are commendable but more needs to be done because “ we have to be alive for us to do anything. For foreign investors to respond to our policies by way of investment, they have to also be alive. The activities of bandits, Boko Haram among others are existential threats. Also, the judgement of the presidential election tribunal will will determine a lot of things in the economy going forward.”
