The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has expressed concerns that the non-payment of foreign exchange (FX) forwards has severely impacted affected companies, pushing many towards bankruptcy. FX forward transactions involve buying or selling foreign currencies at a predetermined price on a future date.
According to Dele Oye, NACCIMA’s president, the non-payment of FX forwards has burdened businesses and banks with exorbitant interest rates, averaging over 35 percent, and affected relationships with international trading partners. NACCIMA has been proactive in addressing the issue, engaging in advocacy and urging the Central Bank of Nigeria (CBN) to reconsider its stance.
Oye warned that forcing companies to settle at current exchange rates could lead to a further crash in the value of the naira and widespread bankruptcies, exacerbating economic instability. The CBN has been working to settle the $7 billion FX backlog liabilities, releasing $500 million to various sectors and paying $2.2 billion so far. However, NACCIMA alleges that the CBN’s decisions lacked procedural fairness, and affected companies were not given a fair hearing.
NACCIMA has escalated the matter to the Ministry of Finance, Ministry of Industry, Trade and Investment, and the House Committee on SME at the National Assembly, highlighting the unconstitutional nature of the CBN’s actions. The Manufacturers Association of Nigeria (MAN) has also expressed concerns that the outcome of the probe has taken too long to conclude, and affected businesses will continue to engage the CBN until the issue is resolved.
