Manufacturers and other private sector operators on Tuesday painted a gloomy picture of how the foreign exchange restriction placed on 41 items by the Central Bank of Nigeria had affected operations in the business sector.

They said that since the restriction order was placed last year, about 272 firms had been forced out of business, 50 of which were manufacturing companies.

While some of the affected manufacturers have relocated to neighbouring countries, according to Manufacturers Association of Nigeria, at least 222 small-scale businesses have closed shops, leading to 180,000 job losses.

As a result of the negative impact of the policy on the operations of manufacturers, stakeholders in the economy including MAN, the National Association of Small and Medium Enterprises and the Lagos Chamber of Commerce and Industry insisted that the policy must be reviewed.

They spoke at the launch of a report on the manufacturing sector by NOI Polls Limited, in collaboration with the Centre for the Studies of Economies of Africa.

The Director, Economics and Statistics, MAN, Mr. Ambrose Oruche, lamented the unavailability of productive inputs, stating that this was the major challenge confronting manufacturers.

He attributed the problem largely to the ban by the CBN on certain items from acessing the official window of the forex market, adding that the current operating environment was too harsh for many manufacturers to continue to operate.

He wondered why the CBN and the Federal Government kept coming out with what he described as conflicting polices, noting that this was affecting the growth of the manufacturing sector.

He said, “Presently, about 50 manufacturers have closed shop, while some have downsized. Some manufacturers are still producing due to their love for this country. Government’s policy on cement should have been adopted in this case.

“In the case of cement, Nigeria used to be a net importer of cement, but the government set up a policy over a five-year period, which made it possible that today, we are a net exporter of the commodity.”

Oruche said the fact that the economy was technically in recession should have made the CBN to redirect its policies towards stimulating the economy rather than tightening money supply.

He also listed high interest rates, poor power supply, policy inconsistency, poor patronage of locally manufactured products, poor supporting infrastructure, among others, as the challenges confronting manufacturers.

In his remarks, the Director, Research and Advocacy, LCCI, Mr. Vincent Nwani, said the CBN announced the ban on the 41 items without consulting other stakeholders in the sector.

He said, “We did press releases; we did stakeholders engagement; we engaged with the CBN at all levels, at least three times; we met the directors twice up to the CBN governor on this same matter of the 41 items- giving them examples of product-by-product.

“There must be an urgent review of the CBN’s policy on the restriction of access to foreign exchange placed on 41 items, as about 16 of the total items on the list serve as critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity for optimal production of the items.”

For instance, he said that the ban on oil palm alone had led to a loss of about 100,000 jobs over the last couple of months, while the ban on glass and glassware resulted in 80,000 job losses mainly in the pharmaceutical industry.

Nwani said many companies in the pharmaceutical sector now found it difficult to package their products.

He said, “Local production of oil palm is put at about 600 metric tonnes annually, but the total demand in the country is put at about 1.8 million metric tonnes.

“Today, Presco Oil has orders of up to December 2017 to fill, it is presently hard pressed with demands. Listing oil palms among the restricted items meant that we have a shortfall of about 1.2 million metric tonnes.

“Some of the items placed on the restriction list by the CBN should be reinstated until the country develops the capacity to produce them locally. Some of the items need a period of between three and seven years for the country to develop self-sufficiency in their production.”

Nwani said, currently, about $10bn of manufacturers’ funds were stuck in foreign countries because the owners had no confidence in the economy.

He said, “We have about $10bn stuck in one country or the other earned by our members. Some of them are not manufacturers; some are agriculturists or merchants of different products.”

Meanwhile, the President of MAN, Dr. Frank Jacobs, has lauded the recent directive of the Central Bank of Nigeria that 60 per cent of foreign exchange allocation should go to the manufacturing sector. The association is also confident that with such powers, manufacturers may determine exchange rate in the country.

Jacobs said at a media briefing in Lagos on Tuesday that the directive would revive the sector and reflate the economy.

He said, “MAN commends the Federal Government and the CBN on this directive. It is a welcome development and will give fillip to efforts of government aimed at reflating the economy.

“This is an opportunity for the manufacturing sector to determine the exchange rate of the dollar. I will encourage our members not to bid too high, to also understand the power they have today to determine the exchange rate. With 60 per cent allocation, the banks will be willing to sell to manufacturers at a comfortable rate because they cannot keep their dollars.”http://punchng.com/272-firms-shut-one-year-man/

so am FTC.after yrs on nairaland.run like yekini into the net,hold the net, tearing the net,yea I made t.oya seun I need my bank alert quickly.

Buhari is certainly a badluck to Nigeria.

The most business unfriendly President that ever existed in 21st century. A man who thinks that every big and successful business owner is corrupt.

If lobbing is a legitimate course in advance democracies, why not here? Everybody needs to be heard.

just wondering how Indians and Chinese succeed in business in our own country but yet we complain no light,no road,even no customer,am not supporting the govt but wish we could do better than them,also o don't like the way they threat our people in the name of offering them jobs

I blame the Dog in Aso Rock.

Is other words, the current foreign exchange policy is futile, ain't serving its purpose nd must be reviewed.
Can't import, can't export, can't locally produce.. I mean what the hell??

Foreign exchange restriction OKed by the president .. What are the advantages since?? Instead there are tension in our economy.

272 firms closing up Dts a bad sign.

Ofunaofu:



“In the case of cement, Nigeria used to be a net importer of cement, but the government set up a policy over a five-year period, which made it possible that today, we are a net exporter of the commodity.”

hope we can see how things are achieved, a policy over a five year period was set, which made Nigeria to be a net exporter of cement. But under this administration, everything must be achieved within 4 years, choking And destroying the economy.

Buhari,why?

A country that will leave a recession soon, makes policy that encourages manufacturing sector to be vibrant and also invest much in his human resources. The economy is so bad that the minimum wage can't even buy a bag of rice. I will expect the government to put more effort in growing the small scale business especially the ones that doesn't require their raw materials source from abroad.
There are plenty Nigerians home and abroad transforming different sectors of business and economy, many graduated with good grades from different business schools (Harvard, LBS) which can help us doing this recession period but do to politics they can't function well in the country. If the government is not consistent with their policy but doing trial and error policy the recession will be around for a long time

272 firm shutdown in one year.


APC has killed the Nigerian economy ooo

Such badnews

272 Ghost manufacturing Firms.


When you manufacture from scratch you don't really have to deal with forex problem but when you import and repackage then you are in for it.

and please we would like to have a list of the Firms, their product and staff strength.

#Thanks.

These firm has added to the unemployment rate with their exist from the Nigerian market.

Buhari has killed the economy

ok na...

bad economy!!!!

King NeBUHARInedzzar the DOG reigneth

Na die we dey.

Really.... Wetin that come new always shines in any angles, wer dem dey bfore buhari govt foolish peoples with different characters........ That's buhari govt.
End time eyes service

272 & still counting,
Buhari, this is for you!

Buhari is taking us back to Normadic age with conflicting policies

This only happens when you have a dollard up there.

The recession is real.

Still struggling to make money in this harsh economy?check my signature

GeeOh:
just wondering how Indians and Chinese succeed in business in our own country but yet we complain no light,no road,even no customer,am not supporting the govt but wish we could do better than them,also o don't like the way they threat our people in the name of offering them jobs

Given how corrupt our politicians and business men, have you ever considered that there is a small chance that these so called successful Chinese and Indian companies may be a conduit for money laundry?

Chinese and Indian business men are as corrupt as it comes, until you start pointing out successful small to medium scale companies in Nigeria owned by business men from countries were corrupt practices are seriously frown upon and the citizen risking a jail term no matter where such sharp practices took place, then we can revisit the issues you raised.

theophorus:
272 Ghost manufacturing Firms.


When you manufacture from scratch you don't really have to deal with forex problem but when you import and repackage then you are in for it.

and please we would like to have a list of the Firms, their product and staff strength.

#Thanks.

Employing ghost workers, paying ghost salary.
Zombies are irredeemable.

So many shops around me are under lock and key for 2 months now

Ehen dem don start.. PMB get ur economic/witchcraft emergency powers quick abeg.
We wait 4 ministers, no change
We wait 4 budget, still no change
They pass budget, yet no change
Let us wait 4 economic powers first


Check my signature for the best!!

SERIOUSLY