Indications emerged over the weekend that the recent currency swap deal entered into by Nigeria and China may have started raising concerns amongst stakeholders in
the local manufacturing scene and the financial sector. This is as standards regulatory authorities in the country are said to be seeking clarifications from the presidency over details of the agreement signed by President Muhammadu Buhari in China.
Though Buhari’s latest deal in China wouldn’t be the first time Nigeria would romance with Chinese currency, the after taste, say some finance experts, still leaves a sour taste in the mouth. “China openly manipulates the yuan to its own economic advantage,” explains Ogunsemore Alaba, former banker and policy analyst. Alaba is speaking against the backdrop of Central Bank of Nigeria’s (CBN) decision, five years ago, to denominate Nigeria’s foreign reserves in yaun.
At the time, yuan sold at four to a dollar, only to devalue their currency few weeks later to 9 yuan per dollar. “We will be left at the mercy of China in this deal,” stated the ex-banker. Unofficial estimate places imports from China into Nigeria at near 70 percent of total imports.
The new deal, worried stakeholders believe, could further erode what is left of the local industry if the Sino-Nigerian currency deal is not well managed. Officials of the country’s regulatory agencies also say that China accounts for the biggest source of fake goods into Nigeria. As gathered, signals from chambers of commerce across the country have shown particular distress over uncertainty as to how the Chinese deal will help local production and local goods.
“There is a great deal of worry I can assure over the matter,” explained an official of the Abuja Chamber of Commerce and Industry (ACCI). He explained that similar worries are being expressed by sister chambers across the country. “A lot of our colleagues are chagrined that the Federal Government did not deem it fit to consult relevant stakeholders in the country before taking the decision,” the official explained, stating that ACCI executive body is making efforts to reach the presidency for detailed explanation of what the deal entails.
Apart from the ACCI, Independent learnt that there are also concerns in the standards regulatory organisations in the country. Officials in Standards Organization of Nigeria (SON), and National Agency for Food and Drug Administration and Control (NAFDAC) and Consumer Rights Protection Council (CRPC), separately, told Independent of their worries over future influx of fake goods into the country. “The recent embargo on forex for 41 items by the central bank has largely forced importers’ attention to local alternatives. But the new China currency deal may reverse whatever gains we have made in the last few months,” explained a director with SON who asked not to be quoted because the matter is still a matter of intense study at the organisation.
The director further stated that his agency may not be able to handle regulatory functions well under the new regime on account of lack of capacity. SON has no standard testing laboratories. Speaking earlier in February, acting Director-General, SON, Dr. Paul Angya, said that the agency lacked internationally accredited product-testing laboratories which has continued to hamper verification of imported products and the ones meant for exports. He added that regulatory agencies go to Ghana for product testing, a situation which the acting DG described as unfortunate.
The situation, according to estimates, leads to forced warehousing of goods put at N2.3 trillion within the specified 90 days verification period. Officials in NAFDAC, CRPC voice similar concern. “China accounts for biggest haul of fake drugs in Nigeria. With free flow of the use of yuan, Chinese currency to do business, we fear that way may be forced to up our game in tracking substandard products making their way into the country,” said an official of NAFDAC.”
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