Sovereign Finance Pledges Support for SMEs After Exchange Rate Unification

Nume Ekeghe

Sovereign Finance Company Limited has reaffirmed its commitment to providing unwavering support to Small and Medium-sized Enterprises (SMEs) in the wake of the recent exchange rate unification in the country.

The firm gave the assurance in a webinar titled, “Unification of Exchange Rate: Impact on Nigerian Small & Medium Enterprises.”

Managing Director of Sovereign Finance Limited, Olusola Dada, emphasised that the exchange rate unification is a favourable policy with huge potential to transform the nation’s economic landscape.

According to Olusola, “The unification of exchange rates will undoubtedly increase Government’s liquidity, as a result of definite rise in revenue accruable to all tiers of Government. This should enhance the ability of the Government to increase minimum wage and embark on critical capital expenditures necessary to catalyze the economy for higher productivity.”

He added that improved liquidity is expected to result in lower interest rates and the availability of more funds for business expansion.

Olusola asserted that the company will be readily available to help SMEs navigate and capitalize on the opportunities arising from the exchange rate unification.

Chief Commercial Officer at Sovereign Finance, Dr. Olatunji Esan, explained in his presentation that the successful floating of the currency regime marks a major shift, with market forces now determining the exchange rate in Nigeria.

He argued that the inflationary impact of the exchange rate would eventually be curtailed by necessary monetary policy measures.

He maintained that the impact should be minimal since most SMEs had already been sourcing their foreign currency from the open market before the policy came into effect.

He further remarked that the unification of exchange rates will eliminate market distortions, particularly arbitrage, establish a level playing field for all participants in the foreign exchange market, and instill confidence in investors.