Experts enlist local content drive as panacea for forex crisis

Capital market experts have stressed the need for management of listed companies to streamline their business operations by seeking viable local content opportunities and indigenous production of commodities to hedge against foreign exchange volatilities and other inflationary pressures.

Besides, the stakeholders, who spoke in an interview with The Guardian, also linked part of the lull in the nation’s capital market to the failure on the part of companies’ board to initiating good policies that would trigger share price appreciation and attract more investors into the company.

The stakeholders believed that local production would improve the performance of these listed companies and reflect on their share prices on the Nigerian Stock Exchange

According to them, if listed companies engage in local businesses and source their materials locally, it would develop smallholder farmers in the business chain and benefit poor subsistence ones and other rural traders in the long term.

Furthermore, it would reduce, to the barest minimum, exchange rate volatility and depreciation, which hurt economic performance by contracting output growth and inflation.

Therefore, they suggested that listed firms must adopt 100 per cent locally sourcing of raw materials, noting that over dependence on foreign raw materials and exposure to foreign exchange has unfortunately, subjected firms to the vicissitudes of the Nigerian economy, a situation which has arisen because in the absence of local production capacity, importation of the foreign based raw materials became inevitable.