FG Spent $11.6m On Armoured Vehicles Amid Forex Scarcity

While the country battled with shortage of foreign exchange, the Federal Government spent $11.56m on remodelling and refurbishing 107 armoured vehicles which were donated by the Hashemite Kingdom of Jordan.

The Second Quarter and Half-Year 2022 Budget Implementation Report seen on the website of the Budget Office of the Federation disclosed that this was done in the second quarter of 2021.

The report further showed that the Excess Crude Account from which the money was taken was depleted from $35.37m as of April 1, 2022, to $0.01m by June 30, 2022.

According to the report, the Federal Government took $35m to procure 2X High Endurance Offshore Patrol Vessels, while $0.01m was received as accrued interest on fund investment between March and May 2022.

Economic Confidential has constantly reported the issue of forex scarcity, which has been a major challenge for manufacturers in the country.

Last year, stakeholders, including the Manufacturers Association of Nigeria and the Association of Small Business Owners, lamented the worsening scarcity of foreign exchange in the country, saying they were already cutting costs as their profits were shrinking.

MAN, ASBON, the Lagos Chamber of Commerce and Industry and industrialists have repeatedly said that the free fall of naira and the attendant forex scarcity had worsened Nigeria’s harsh business environment.

The President of the ASBON, Dr Femi Egbesola, in an interview with one of our correspondents, lamented that small businesses were the worst hit by forex scarcity.

He said some medium and large businesses still had the opportunity of getting certain amount of forex from the commercial banks.

Egbesola said, “For small businesses, bureaucratic bottlenecks hamper their access in commercial banks, pushing us to the parallel market.

“In the past few months, the naira has been on a free fall, and many of our members can no longer produce because the raw materials cannot be imported. You need to get payment overseas before you can get your shipment and if you cannot get your raw materials, you are going to close shop.”

“Some of our members that have been able to get some forex in trickles have been under-producing. They have had to cut cost and downsize their staff. That is impacting on employment again. Even their products are now more expensive for consumers.”

The Director-General of MAN, Mr Segun Ajayi-Kadir, said that the general concern among manufacturers was the difficulty and “most often inability, to access the forex they need to purchase machines, spares and critical raw materials that are not locally available.”

He noted that manufacturers’ funds in Nigeria would be tied down at the point of making requests, and if commercial banks finally released the regularly meagre forex, it would be inadequate to procure the inputs, thereby distorting the production process and hurting their bottom-lines.

He said, “This abysmal allocation to the manufacturers is quite disappointing and unhelpful. It threatens the relapse of the recent gains in terms of the growth numbers in the economy.”