Shortage of forex pushes small-scale textile merchants out of business in Kano

The inconsistent Federal Government policy as it affects foreign exchange, is crippling socio-economic activities in  commercial of Kano, one of Nigeria’s leading business cities.

One of the segments of the state economy where the negative effect of the new forex policy is most glaring is in the commerce and trade sub-sector, where a large number of small, and medium scale players are being forced to shut down operations.

Policy checks conducted by BusinessDay weekend, shows that over 2000 small scale textile merchants have of recent closed down operations in the popular ‘Kantin-Kwari’ as a result of the government forex policy.

Nigeria’s apex bank, the CBN since the advent of the present administration has introduced several policy directives guiding the disbursement of Foreign Exchange to end users in the country.

One of the directives was contained in a circular TED/FEM/FPC/GEN/01/007, issued three months ago which stipulated that 60% of all forex disbursement should be allocated to the manufacturing players in the country.

Under the directive, the CBN mandated that the balance of 40% of the allocations be set aside to meet all trade obligations, and visible and invisible transactions.

Prevailing situation in Kano indicated that the implementation of the policy has continued to weigh heavily on a state that for centuries had been the threshold of commerce and trade.

According to findings, the importation dependent nature of commerce and trade, the two key drivers of the state’s economy is making the policy to have negative impact on operators of businesses in the state.

Confirming the negative impact of the policy, Murtala Maisallah, one of the textile dealers in the Kantin –Kwari Market, said the government policy is the worst thing that have ever happened to business in the state.

According to Maisallah, who is the managing director of SB Maisallah & Son Limited, a company involved in the importation of textile materials from oversea, disclosed that the policy has forced most of dealers in the imported textile materials to stop operations.

“It is unfortunate that Kano state is now the biggest victim of the new government policy on Forex. This is a government that we worked very hard to put in place thinking it is out to help the ordinary people. On a daily basis people of the state are becoming poorer.

“As I am talking to you now, over 2000 small traders that depend on us for their business have been forced to disengage from business because of the difficulties that we are facing in getting forex for our operations.

“At the moment, the group of people benefitting from the policy is the Chinese and Indians importers, who have the foreign exchange to bring in products. They are the only people benefiting from the policy” he explained.