RECENTLY the issue of foreign exchange (forex) has raised its head, especially in the wake of falling oil and gas production, and in particular how its pricing and distribution affect our import bill.

Many in business and the public want solutions, so here are two.

1. Floating currency The first would be to allow the currency to float. This will ensure that forex is used in an economical manner and prevent the excessive importation of goods.

This is especially important since large amounts are used to settle US-denominated purchases.

The Ministry of Finance stated that almost $2 billion was spent doing so.

Another benefit would be that it would put less pressure on EximBank to provide financing for small enterprises, as they could now go on the open market to obtain foreign currency.

2. Reform forex allocations The second would be to reform how EximBank allocates forex for businesses.

At the present, over 90% of the funds are given to small and medium enterprises, with export earners not allowed to access the facility. This sounds like a good idea to ensure everyone has an equal opportunity, but increases the difficulty of obtaining large loans for more capital-intensive projects.

Thus, a simple solution would be having the bank provide funding for already profitable businesses in the form of low-interest loans, to help expand their operations, or even get into manufacturing, such as distributors. Of course, in order to prevent fraud or mal-investment, there would be strict lending criteria, such as a good cash flow, and having said company put up a share of ownership as collateral.

There are also structural issues to address the economy-such as taxation and over-regulation-but these two reforms would put us on the path of sustainable prosperity.

Andre Araujo Woodbrook