A call has gone out to the Central Bank of Nigeria (CBN) to take urgent steps to stem the current depreciation in the value of Nigeria’s currency – the Naira. President, Association of Business Owners of Nigeria (ASBON), Dr Femi Egbesola stated this in particular reference to the United States dollar, noting that its consistent gain against the Naira is creating a challenging environment for agro exporters.
According to the ASBON boss, the challenge posed by this trend hinges on the increased cost of operation of international shipping companies whose services are dominated in foreign currency. His words, ‘‘many exporters are facing challenges of logistics, when it comes to international shipments of agro commodities, they need to pay the shipping charges in US dollars hence, additional amount has to be paid for the same shipments, making export business less profitable for the companies.”
On the export front, Dr. Egbesola said Nigerians were competing with exporters from other countries where their currencies make the price of their produce competitive as against Nigerian exporters who are faced with high freight costs denominated in foreign currencies, which ends up pummeling their profit margins.
With the government encouraging more Nigerians to get into exports, Egbesola cautioned that the naira has to be boosted as its continued depreciation could lead to an overall decline in trade volumes from Nigeria, a situation that translates into a serious challenge for the shipping and freight forwarding sector. The concomitant implication would be a decline in international trade heralding a regime of idle capacity or not-fully-loaded shipments resulting in lower revenues as well as higher operational costs per customer consignment.
On the whole, Egbesola urged the government to provide more incentives to boost agricultural productivity and promote secure livelihood for a large number of farm families, stating that ‘‘farm productivity and profitability will be greatly helped if there is improved support to reinvigorate farming tradition as a means to sustainable livelihood’’.