 Welcome back from that one. Now the central bank's decision to intervene in the Forex market suggests it is now ready to provide a steady supply of Forex in the official market, a situation that could strengthen the exchange rate at the black market. Well I have the president of the Association of Small Business Owners, Azbin, Dr. Femi Egbeshola joining me now to discuss further. Good morning to you Dr. Egbeshola, thanks for joining us on business and science. Good morning and thank you for being with me. Alright, when the CBN imposed the ban in 2015 of June, it clarified that it was to conserve scarce foreign exchange and encourage domestic production, self-sufficiency and export. But right now do you think this move is what is needed with all that we have going on in the Forex regime? Well from our point of view the policy has not really achieved its intended purpose because those products that are underban, sorry those products that are underban for Forex are still everywhere in the markets. It means that the importers are still looking for the parallel markets to source for foreign exchange to bring in these goods and the products and that means that it is going to have more stress on the Naira and that's why we have Naira depreciating every day to the point we have it today. But more professionally we will have expected that there should be what is called a policy impact assessment being doled out to be able to actually decipher the benefits or otherwise of that policy for the past 80 years to date. That will have been able to give us a direct approach to know if really the policy has been impactful or not. But for CBN to come out in their wisdom to now make a U-turn with the policy it's an indication that they have also realized that it has not really worked. To some of us CBN should be more concentrated on monetary policies rather than fiscal policies. Putting a ban on 43 items to us is more of a fiscal policy issue as we live to the fiscal authorities to handle not for CBN. But we are happy that eventually this ban is being lifted because we feel that it will reduce inflation at the end of exercise. We also believe that it will also improve the Naira because the downward fall of the Naira now is unabated and something needs to be done and they need it. Beyond that we also feel that the private sector feels that CBN now should be thinking more of how to increase the availability of dollar in the market. There are more innovative ways of making dollar more available in the market. There are so many ways to do this and we want CBN to concentrate more on that. We also feel that maybe one best way to go would have been removing those items of the ban list gradually and the best way CBN can know what to lift now and what to leave for some time would have been a consultative engagement with the organized private sector which did not happen before this takes place. Speaking about the organized private sector, the Lagos Chamber of Commerce and Industry also reacted to this and says that the new FX policy of the CBN on banning the items that were excluded from accessing FX at the official market. They said these are a market friendly step towards unifying exchange rates and it's expected to curtail inflationary pressures in the short term. I don't know if you agree with that line of reasoning. Yes actually it is expected to reduce inflation in the short term but be that as it may we also must realize that we have stakeholders in the economy of our country and everybody should be brought on board when critical policy decisions like this needs to be taken. For example some companies because of the ban has done some backward integration to look at how they can localize their input instead of importing into the country because of the former ban and this has cost them a lot of time, money, energy and resources. So coming up to now lift the ban without prior engagement may have a lot of stress on this company and put them at a loss at the end of the day which may also result into job losses. So we think that when policies like this are to be made there is need for governments particularly agents of government that are specifically in that position to do such policies to engage more with the private sector so that it will be a win-win solution and win-win situation at the end of the day. According to the central bank these actions will boost liquidity in the Nigerian foreign exchange market and it's a saying that they are going to be intervening from time to time stating that these interventions will decrease as our liquidity improves. How do we act? This means that the CBI will now be selling effects once again or just how? Well it is expected to increase liquidity if it is annexed and implemented the right way. In this part of the world we have wonderful policies in the past but implement monitoring and implementation has been one big challenge and then when it comes to having a positive impact in terms of liquidity bringing the official market to the parallel market to be at par a lot of things still needs to be done. If we still have corruption it would be difficult for us to have a parallel exchange rates because those who are involved in corruption will not go to the bank for forex they will still go to the parallel market. Those who are also involved with different kinds of vices maybe drop trafficking and the rest will still rely on the on the parallel market for their exchange. So CBI needs to go beyond just lifting ban on the 43 items to see how they can creatively and innovatively bring out possible solutions to be able to really hit the fall of the at the tip and this needs to be done with quite a lot of engagement with stakeholders like I mentioned the other time. We also have the opinion that when it comes to this 43 items some of them need outright banning not just ban from forex. We have some products that are on that list that have been manufactured locally here that we need not encourage to be brought to the market at all. For example toothpicks why must we go to the to the bank to get forex or to see their forex or bring toothpicks to the country? Why must we go to the bank or to the foreign package to bring in chicken or turkey to the country? This is some of these things are to be an outright importation ban not just forex ban. So there's a lot that needs to be done. There's CBI for us who have more engagement on this issue so that we can have a situation whereby everybody will own the policy we see as a working solution and we will be able to get it better so that inflation can be arrested liquidity can improve and then our issue with LC can also begin to work out. We have a lot of backlog of a letter of credit now because the dollar is not there. So all of this can only be addressed if we have a holistic solution by bringing everybody to the table to talk about it. You represent the small business owners in the country now is a good thing that you have mentioned them some of this item that should not even be talked about in the first instance toothpick check-in even rise as it were but my question right now would be this policy the back and forth as it were what impact you know does it have on the small and medium scale enterprises? It's not that a negative impact it's not that a negative impact because policies affect the more those at the bottom of the current and this time the nano micro small and medium businesses they are more impacted because they have less power to to cushion the effects of some of the negativities of these policies like I did mention the other time because there was a ban some people have invested so much in making an alternative for example toothpicks we have some small business owners who are now producing toothpicks and are selling into the markets now if the forest is opened up it means and there's no ban on the the importation ban on the products it means that toothpicks will begin to add their flow into the country and begin to compete with the micro small businesses that are already doing these toothpicks you should know that the packaging the packaging method and some of the other things included in some of these foreign products make it more attractive to our local consumers and now have a negative impact on the local manufacturers who are already doing it and finding ways to improve day by day to be able to meet with international standards it means that if these people are affected or impacted negatively we will continue to have more job losses and it will also mean that small businesses may continue to fizzle out as we are having at the moment research and statistics shows that we have lost about three million businesses in these last two years it may increase if nothing is done and that's why some of us feel that well it's good as intervention is being mentioned but when you mention intervention it should not be just in the world intervention we must know what it takes how which is going to be the kind of intervention that is coming who are those that are going to benefit and the other dynamics that is associated with this that is when we can really know that oh that yes if this intervention actually see the light of the day it will be able to arrest some of the challenges that this new policy will have on smaller micro businesses all right it's a good thing again that you have mentioned the the subject matter intervention you know people are wondering because it is unclear how much demand this new policy will drive to the official i and e window and do you really think the central bank has the capacity to meet this demand in the short term until liquidity returns as it claimed i really don't think so i really don't think so our foreign reserve is uh foreign exit reserve is being depleted by day the country is already in depths i really don't see the kind of intervention that is coming now uh that can have a and wholesale effects on the economy particularly on the business sector uh at the moment um we have quite a lot of interventions even on grand that are not yesterday we're being impactful one of it is the rt 200 that cbl launched 2022 that's last year that he says expected to to have more value to importer so that they can do more of exports sorry to exporters rather so that they can do more of export and bringing foreign exit into the country how many people have been able to access this fund is the terms and conditions for accessing the fund accessible to micro and small businesses the answer is no so that's why there is proper emphasis that should be placed on engagement with stakeholders so that cbl itself can come to understand what really is the business climate from the point of the players and actors in that sector not from what are theorized in the book or office there's need to also make sure that the intervention gets to the right beneficiaries of this intervention not political political state business owners these are facts that needs to be worked upon if we really want the intervention to be successful the next question is what is the extent of the intervention some of the intervention we have had in the past in part 10 maybe two three percent of the of the business sector so if I have an intervention that is expected to go around 40 million 40 million entrepreneurs at the counter at the moment and we have it in batting just 500,000 what's the volume of 500,000 compared to 40 million entrepreneurs these are some of the things we need to look at and when you're talking about intervention it must be well spread out those that are expected to benefit must know all the terms and conditions from a big issue and they must be able to now prepare themselves to be able to take advantage of it this at the moment we don't know we don't know how the intervention is going to come when it is going to come the format it's going to take and the rest of it all right also interesting is that most supply you know currently goes to the black market and will remain so if the exchange rate disparity remains above five percent the sepian also has a forex backlog of around eight billion dollars and another 20 billion dollars in swaps with Nigerian banks how do you think all of this will really play out I am just beginning to really that's the more reason why our narrative is falling because more people now go to the parallel markets to source for forex and that's just too bad as of today particularly since February of this year foreign investors and foreign exporters to our country has been rejecting our lc they no longer have trust in cdn they no longer have trust in our banks they no longer have trust in Nigerian businesses because of the several backlogs of lc's that were unattended to and that means that everybody the house now go to the bank will now shift into the black market or the parallel market the implication of that is that naira will continue to fall because it is a great issue of demand and supply that is simple economics naira will continue to fall and when naira keeps falling it means that inflation will continue to rise and that's what we have been experiencing for the past eight months now naira the inflation is at its highest peak now we have about six percent inflation rate in the country and it means that the consumers will have less disposable income even by whatever they want to need consumer goods or services that they require they have less capital less fund to purchase it and that also implies that the companies will sell less of what they have been selling before when they sell less it means they have to contrast their production process reduce their staff increase joblessness and the rest of it when joblessness is there those who are jobless must find a way to keep ends meet one way of keeping ends meet is involving them seven by six in crime in cyber crime and the rest and that's not what I'm tempted to just chip in one more question as we round off now because I'm thinking about the CBN lifting these items from you know it's boundless now to the fact that some of those leaves some of these items rather are still on the customs bad list so how what's the synchronization I mean how do we play out all of the how do we even begin to understand if the CBN is saying that it is no longer part of our items on the list and it's and those items are still on customs on bad list and that's one of the challenges where they need to be a synergy between all arms of governments particularly when there are major policies like this if you go to the market today you see imported vegetable oil that is expected to be all that important you see rice that's also expected to be all that both imports and forex but you see many of these commodities you now begin to ask yourself how do they find their way into our shores how do they end up it means that there's a gap somewhere in our security system gaps away in our enforcement and monitoring system and other gaps that can be ended to fight that's why we keep our marine on the fact that for things to work every stakeholder must be brought to the table to make policy from up in issue and safety implementation thank you I'm sorry I'm out of time I didn't mean to just bought in there but then we do appreciate them all of the useful inputs that you have brought specifically the issue of having a bit of synchronization between the regulators we do appreciate your time once again Dr. Fermin Egbershola is the president of Osborne Association of Small Business Owners of Nigeria and that's the size of the show for today I am Justin Akademi many thanks for being there