Key questions this article answers:
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FMCGs provide everyday products like soaps and seasoning. To produce these products, they import their raw materials. However, forex illiquidity has been a blocker for them over the years. So, how will this new FX reform affect FMCG companies?
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The exchange rate reform not only has effects on FMCG companies, it will also affect consumers, but how?
Fast Moving Consumer Goods (FMCGs) companies have struggled with Nigeria’s controlled exchange rate system for almost a decade. They found it challenging to access dollars for imports of raw materials like durum wheat, palm oil and spare parts for equipment. Repatriating capital and profits to their parent companies abroad was also problematic.
Not only was access to foreign exchange (FX) challenging, but getting FX at the black market was expensive, no thanks to the CBN’s FX rationing at the official window and import restrictions. FMCGs eventually resorted
