Erratic Exchange Rate Creating Market Distortion, Distrust, Instability’, Nwokeoji

BY EGUONO ODJEGBA

The national leadership of the Association of Nigerian Licensed Customs Agents (ANLCA) has said the ongoing regime of unstable foreign exchange (FX) system is fast creating market distortions, distrust and general instability in the life of the masses of Nigerians.

Adding its voice to the general concerns, ANLCA further notes that the provocative misapplication of the nation’s monetary instruments that has since reduced the FX system into a lotto like game is not only insensitive and oppressive but smacks of deliberate designs by the nation’s economic managers to completely drown Nigerians in the sea of hardship, and urged the federal government to urgently halt the fumbling and wobbling regime.

A statement signed by Mr. Emenike Kingsley Nwokeoji, National President of ANLCA and sighted by our reporter expressed angst and unbelief how the FX rate  is programmed to achieve forced growth rise despite its negative ripple effects on trade and market stability, describing the behaviour of the present administration and its economic minders as shameful and disappointing.

The ANLCA President notes that its members and their principals (importers) who are doubly impacted are not only suffering alongside other Nigerians but also passing through harrowing trading atmosphere due to the disruptive behavior of the fixed exchange rates; which he says has also significantly ruptured market competitiveness, even as the development has started to erode buyers/sellers confidence and trust, home and overseas.

Nwokeoji outlined over sten critical areas the disruption has exposed ordinary Nigerians and further reduced their standard of living, in relation to trade and market forces; as indeed the entire economy and the buying power of the masses to be able to withstand the prevailing, insensitive and oppressive regime since inception.

The statement with the theme ‘Nigeria’s Foreign Exchange Instability And Its Economic And Social Implications’ condemned the current monetary system flip-flop as unbecoming.

“A frustrating report online announced that the exchange rate has moved from N1, 356 per $1, to N1, 431/$1 within 24 hours. Incredible!! That means more economic challenges for the poor masses, who have to, since May 29, 2023 contend with the ever increasing cost of PMS, endure bad roads infrastructure, rising cost of foodstuffs, insecurity, hopelessness amidst so called renewed hope, which has long gone awry.”

Apparently appalled by the stance of the new government on the galloping hardship faced by the masses, the association wondered whether it is a crime to be a Nigerian.

“We are first and foremost Nigerians, before we are professional Customs Brokers. What really is the offense of Nigerians to deserve these unnecessary hardships deliberately foisted on them by the same people who claim to come to serve us, but instead unleashing devastating, damaging blows on our psyche and physical beings?”

The ANLCA President mulled the unavoidable consequences in lax handling of the nation’s monetary system on trade, home and foreign, especially as an import dependent nation.

“The regular FX increases reduces economic growth by creating business uncertainties. For instance, an order is placed for imports at an existing exchange rate, only for it to officially change within two hours of such an order, thereby creating distrust and a loss of confidence between two transacting entities.

“That distortion creates instability in the various markets, businesses and households. A sudden disruptive shift/review of FX rates causes deterioration in competitiveness, and erodes confidence and trust between clients nationally and internationally.”

He continued: “Sharp, unexpected rise in FX rates, especially by government fiat, lowers productivity and profits margin. Inevitably, the instability in Foreign Exchange rates, since Nigeria is still imports dependent, increases domestic prices of goods and services.

“Regular reviews of FX rates cause weaker domestic currency, which makes imports more expensive, while stimulating exports by making them cheaper for overseas customers to buy. This means Nigeria exports earn less, with little or no added value to domestic products.”

Apparently helping the economic managers to appreciate the fundamental dynamics they might have missed out in their Oxford University training, ANLCA further note the following fallouts.

“A weak or strong currency can contribute to a nation’s trade deficit or trade surplus over time. Three main impacts of economic instability include business cycle differentials, inflation and unemployment, which ultimately leads to criminality.

“The inconsistencies in FX rates also causes financial losses in Banks. With the constantly raising of foreign exchange which directly impacts costs of goods and services in the markets, distribution centres, Nigerians of all shades of life are affected. This is because we all patronize the markets where the goods and services are accessed by Nigerians.

“So, the exchange rates’ regular upward reviews by the FGN/CBN, affects all of us equally as Nigerians, because we all go to the same market where all the imported goods and services affected by the instability of the exchange rate regime, end up.”

Speaking directly, the ANLCA leader faulted those at the federal ministry of finance and the apex banking regulatory body for knowingly unleashing hardship on the Nigerians; and charged them to more constructive, productive and sensible in their assignments.

“But, quite honestly, those charged with the economic management of our God-given resources, ought to be thinking outside the box for solutions that does not frustrate the lives of the people, at least, not for this long. Our economy’s managers should come up fast with solutions to get us out of the present economic and social quagmire, before the bubble bursts.

“These recent increases in the exchange rate are affecting all aspects of our lives through high inflation. The government really needs to do something very fast, in order to lessen the burden of families and businesses. It’s daily becoming unbearable for the ordinary Nigerian to survive.”

He also called on the Nigerian labour movement and all other economic related groups not to sit on the fence but join forces with customs brokers, freight forwarders, importers and operators in the logistics value chain to challenge the government with the prospect to halt the tidal FX rate and to discontinue the ongoing misrule in all ramifications.

“NLC, MAN, NACCIMA, LCCI, and infact all the economy-related interest groups should join ANLCA to pressure the Federal government to back down on these increases that does not do anyone any good.

“We should tell the Federal Government in an unmistakable terms that they should stop punishing Nigerians for what the elites/cabals/economic saboteurs have deliberately unleashed on Nigerians over time”, he said.