Telecommunication sector seek direct foreign exchange allocation

The Association of Licensed Telecommunications Operators of Nigeria, ALTON, has requested for direct Foreign Exchange (FX) allocation for the telecommunications sector.
Tellforceblog Telecommunication sector seek direct foreign exchange allocation
Engr. Gbenga Adebayo
Gbenga Adebayo who is the ALTON Chairman, in Lagos, on Saturday, March 11, 2017, said that the telecom sector needs to be supported with such dirext FX allocation from the Central Bank of Nigeria (CBN).

The ALTON chairman said that telecom operators faces various challenges while  purchasing FX from Interbank Market to settle the Equipment Suppliers and Foreign Vendors.
”In November 2014, the CBN excluded telecommunications equipment from the Retail Dutch Auction System (RDAS), where the exchange rate was N155 per dollar.

”ALTON members were mandated to purchase FX from Inter-bank at the rate of N199 per dollar.

”The CBN subsequently introduced a floating FX regime at the inter-bank market and cleared three months backlogs at N280 per dollar, and this technically moved the exchange rate from N199 to N280 levels.

”CBN then issued another circular mandating banks, effective Aug. 22, 2016, to sell 60 per cent of all FX availability, irrespective of source of inflows, to the manufacturing sector and the balance (40 per cent ) to other sectors.

”This directive tactically closed FX inflows even from ALTON’s members, thereby exacerbating the impact of the liquid FX market on our members operations and the industry at large,” Adebayo said.
Adebayo recall that on October 14, 2016, the CBN further asked banks to submit all outstanding FX requests for the agriculture, manufacturing and airlines sectors, to allow it sell two months in advance.
He also noted that the equipment imported by the telecom industries, either via Letters of Credit or Certificate of Capital Importation (based on deferred payment terms), are excluded from the intervention.
He said: ”Telecommunications service providers are similar to manufacturing firms and deserve to be treated in the same manner.

”The core network equipment and other auxiliary equipment procured for providing voice and data services are equivalent to plant and machinery acquired by the manufacturing firms.”

The ALTON chairman said that the telecommunications industries was termed ‘infrastructure of infrastructures’ and the ‘Social Overhead Capital‘, which gear productivity in other sectors of the economy.
”In the light of the foregoing, ALTON respectfully requests the Nigerian Communications Commission (NCC) to fast-track the ongoing engagement with the CBN.

”NCC should include telecommunications equipment, both visible and invisible ones, among the list of items to be allocated from the 60 per cent FX availability by the banks, regardless of source of inflows.

”This is to ensure the continued provision of world class telecommunications services to the consumers,” he said.
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